Petition for Writ of Certiorari — Medical Marijuana, Inc., et al., Petitioners v. Douglas J. Horn
Supreme Court briefOct 3, 2023
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No.
In the Supreme Court of the United States
MEDICAL MARIJUANA, INC.; DIXIE HOLDINGS, LLC,
AKA DIXIE ELIXIRS; RED DICE HOLDINGS, LLC,
PETITIONERS,
v.
DOUGLAS J. HORN,
RESPONDENT.
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
PETITION FOR A WRIT OF CERTIORARI
ROY A. MURA
SCOTT D. MANCUSO
MURA LAW GROUP, PLLC
930 Rand Bldg.
14 Lafayette Square
Buffalo, NY 14203
Counsel for Medical Marijuana, Inc. and Red Dice
Holdings, LLC
RICHARD E. LERNER
HANOCH SHEPS
MAZZOLA LINDSTROM LLP
1350 Avenue of the
Americas, Second Floor
New York, NY 10019
Counsel for Dixie Holdings, LLC
LISA S. BLATT
Counsel of Record
SARAH M. HARRIS
AARON Z. ROPER
CLAYTON P. PHILLIPS
WILLIAMS & CONNOLLY LLP
680 Maine Avenue SW
Washington, DC 20024
(202) 434-5000
lblatt@wc.com
Counsel for Petitioners
QUESTION PRESENTED
The Racketeer Influenced and Corrupt Organizations Act (RICO) creates a civil treble-damages action for
“[a]ny person injured in his business or property by
reason of” certain offenses. 18 U.S.C. § 1964(c).
The question presented is:
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.
(I)
II
PARTIES TO THE PROCEEDING
Petitioners Medical Marijuana, Inc., Dixie Holdings,
LLC, AKA Dixie Elixirs, and Red Dice Holdings, LLC
were appellees in the court of appeals and defendants in
the district court. Dixie Botanicals was also a defendant
in the district court.
Respondent Douglas J. Horn was appellant in the
court of appeals and plaintiff in the district court. Cindy
Harp-Horn was also a plaintiff in the district court.
III
CORPORATE DISCLOSURE STATEMENT
Petitioners Medical Marijuana, Inc. and Dixie
Holdings, LLC, AKA Dixie Elixirs, have no parent
corporations, and no publicly held company owns 10% or
more of their stock.
Petitioner Red Dice Holdings, LLC is wholly owned
by petitioner Medical Marijuana, Inc. No other publicly
held company owns 10% or more of its stock.
IV
STATEMENT OF RELATED PROCEEDINGS
This case arises from the following proceedings:
Horn v. Medical Marijuana, Inc., No. 22-349
(2d Cir. Aug. 22, 2023) (reversing partial
judgment for defendants)
Horn v. Medical Marijuana, Inc., No. 15-cv701 (W.D.N.Y. Jan. 24, 2022) (entering partial
judgment for defendants)
There are no other proceedings in state or federal
trial or appellate courts, or in this Court, directly related
to this case within the meaning of this Court’s Rule
14.1(b)(iii).
V
TABLE OF CONTENTS
Page
OPINIONS BELOW ...........................................................1
JURISDICTION..................................................................2
STATUTORY PROVISION INVOLVED .......................2
STATEMENT ......................................................................2
A.
Statutory Background .......................................4
B.
Factual and Procedural Background ..............6
REASONS FOR GRANTING THE PETITION.........11
I.
The Circuits Are Divided 3-2 Over RICO’s
Application to Economic Harms from Personal
Injuries ....................................................................12
II.
The Question Presented Is Important,
Recurring, and Squarely Presented ....................17
III.
The Decision Below Is Incorrect .........................20
CONCLUSION ..................................................................25
VI
TABLE OF AUTHORITIES
Page
Cases:
Anza v. Ideal Steel Supply Corp.,
547 U.S. 451 (2006) ........................................................ 17
Aston v. Johnson & Johnson,
248 F. Supp. 3d 43 (D.D.C. 2017) ................................ 16
Blevins v. Aksut, 849 F.3d 1016 (11th Cir. 2017) ............ 14
Brown v. Ajax Paving Indus., Inc.,
752 F.3d 656 (6th Cir. 2014) ......................................... 12
Comm’r v. Schleier, 515 U.S. 323 (1995) .................... 21, 24
Diaz v. Gates,
420 F.3d 897 (9th Cir. 2005) (en banc) ............ 15, 17, 18
Doe v. Roe, 958 F.2d 763 (7th Cir. 1992)..................... 13, 19
Evans v. City of Chicago,
434 F.3d 916 (7th Cir. 2006) ........... 10, 13, 15, 17, 18, 22
Grogan v. Platt,
835 F.2d 844 (11th Cir. 1988) ..................... 10, 14, 18, 19
Guerrero v. Gates, 442 F.3d 697 (9th Cir. 2006) .............. 15
H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229 (1989) .... 17, 19
Hill v. Tangherlini, 724 F.3d 965 (7th Cir. 2013) ........... 10
Holmes v. Sec. Inv. Prot. Corp.,
503 U.S. 258 (1992) .................................................... 5, 22
Iron Workers Loc. Union No. 17 Ins. Fund v.
Philip Morris Inc.,
23 F. Supp. 2d 771 (N.D. Ohio 1998) ........................... 22
Jackson v. Sedgwick Claims Mgmt. Servs.,
731 F.3d 556 (6th Cir. 2013) (en banc)
.................................................. 3, 10, 12, 13, 16, 17, 19-22
Lerner v. Fleet Bank, N.A.,
318 F.3d 113 (2d Cir. 2003) ............................................. 5
Miller v. York Risk Servs. Grp.,
2013 WL 6442764 (D. Ariz. Dec. 9, 2013) ................... 16
VII
Page
Cases—continued:
Or. Labs.-Emps. Health & Welfare Tr. Fund v.
Philip Morris Inc., 185 F.3d 957 (9th Cir. 1999) ...... 22
Pilkington v. United Airlines,
112 F.3d 1532 (11th Cir. 1997) ..................................... 14
Reiter v. Sonotone Corp., 442 U.S. 330 (1979) ........... 21, 24
RJR Nabisco, Inc. v. Eur. Cmty.,
579 U.S. 325 (2016) .......................... 2, 5, 6, 18, 20, 21, 23
Russello v. United States, 464 U.S. 16 (1983).................... 4
Ryder v. Hyles, 27 F.4th 1253 (7th Cir. 2022) ................. 13
Ryder v. Hyles,
2021 WL 7285358 (N.D. Ill. July 29, 2021) ................. 16
Sedima, S.P.R.L. v. Imrex Co.,
473 U.S. 479 (1985) .............................................. 5, 17, 18
Spadaro v. City of Miramar,
855 F. Supp. 2d 1317 (S.D. Fla. 2012) ......................... 15
United States v. Burke, 504 U.S. 229 (1992) .................... 21
Yegiazaryan v. Smagin, 599 U.S. 533 (2023) .................. 23
Statutes and Rule:
18 U.S.C.
§ 1961 ................................................................................. 5
§ 1962 ................................................................................. 5
§ 1963 ................................................................................. 5
§ 1964 ................................................. 2, 5, 9, 10, 12, 14, 21
§ 1965 ............................................................................... 19
21 U.S.C. § 802 (2012) ........................................................... 7
21 U.S.C. § 802 (2018) ........................................................... 7
28 U.S.C. § 1254 ..................................................................... 2
VIII
Page
Statutes and Rule—continued:
Organized Crime Control Act of 1970,
Pub. L. No. 91-452, 84 Stat. 922 .................................... 5
Federal Rule of Civil Procedure 54 .................................. 10
Other Authorities:
116 Cong. Rec. 25,190 (1970) ................................................ 5
Diane Adam, Wegmans to Start Carrying cbdMD
CBD Products, Winsight Grocery Bus.
(Oct. 3, 2022), https://tinyurl.com/2wx3ey6m .............. 6
Admin. Off. of the U.S. Cts., U.S. District
Courts—Civil Cases Filed, by Nature of Suit
tbl. 4.4 (2022), https://tinyurl.com/bd8pc86p ............. 18
Brent A. Bauer, M.D., What Are the Benefits of
CBD—and Is It Safe to Use?, Mayo Clinic,
https://tinyurl.com/yc7h87z5 .......................................... 6
Black’s Law Dictionary (Rev. 4th ed. 1968).................... 21
Current Circuit Splits: Criminal Matters,
2 Seton Hall Cir. Rev. 261 (2005) ................................ 16
Dr. Richard A. Friedman, Opinion, Is CBD
Helpful, or Just Hype?, N.Y. Times,
Dec. 26, 2018 ..................................................................... 6
Grand View Research, Cannabidiol Market Size,
Shares & Trends Analysis Report (2023),
https://tinyurl.com/hc4x2v6p ......................................... 7
Peter Grinspoon, M.D., Cannabidiol (CBD):
What We Know and What We Don’t,
Harv. Health Publ’g (Sept. 24, 2021),
https://tinyurl.com/mr376e7t ..................................... 6, 7
Alena Hall & Robby Brumberg, CBD Statistics,
Data and Use, Forbes (Sept. 7, 2023),
https://tinyurl.com/3kzxju7f ........................................... 6
IX
Page
Other Authorities—continued:
Eric Lloyd, Comment, Making Civil RICO
“Suave”: Congress Must Act to Ensure
Consistent Judicial Interpretations of the
Racketeer Influenced and Corrupt
Organizations Act,
47 Santa Clara L. Rev. 123 (2007) ............................... 16
Joel W. Mohrman et al., Recent Developments in
Business Litigation,
42 Tort Trial & Ins. Prac. L.J. 327 (2007) .................. 16
Nicholas L. Nybo, Note, A Three Ring
Circus: The Exploitation of Civil RICO, How
Treble Damages Caused It, and Whether Rule
11 Can Remedy the Abuse,
18 Roger Williams U. L. Rev. 19 (2013) ..................... 18
Angelica Peebles & Lauren Hirsch, Kroger to Sell
CBD Products in Nearly 1,000 Stores, CNBC,
June 11, 2019 .................................................................... 6
Jacob Poorman, Comment, Exercising the
Passive Virtues in Interpreting Civil RICO
“Business or Property,”
75 U. Chi. L. Rev. 1773 (2008) ..................................... 16
Jed S. Rakoff et al., RICO: Civil and Criminal
Law and Strategy § 1.07 (Jan. 2023 update) ............. 16
Reid J. Schar, 12 Bus. & Com. Litig. Fed. Cts.
§ 126:35 (5th ed. Nov. 2022 update) ............................ 16
TRAC Reports, Anti-Racketeering Civil Suits
Jump in 2018 (Oct. 30, 2018),
https://tinyurl.com/3akvkcvu ....................................... 19
Patrick Wackerly, Comment, Personal Versus
Property Harm and Civil RICO Standing,
73 U. Chi. L. Rev. 1513 (2006) ..................................... 16
X
Page
Other Authorities—continued:
Alex Williams, Why Is CBD Everywhere?,
N.Y. Times, Oct. 27, 2018 ............................................... 6
Sean Williams, 9 Major Retailers that Are Selling
CBD Products, Motley Fool (June 3, 2019),
https://tinyurl.com/yury2zrf........................................... 6
World Health Org. Expert Comm. on Drug
Dependence, Cannabidiol (CBD) (2018),
https://tinyurl.com/3u3xuka5 ......................................... 7
In the Supreme Court of the United States
MEDICAL MARIJUANA, INC.; DIXIE HOLDINGS, LLC
AKA DIXIE ELIXIRS; RED DICE HOLDINGS, LLC,
PETITIONERS,
v.
DOUGLAS J. HORN,
RESPONDENT.
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
PETITION FOR A WRIT OF CERTIORARI
Petitioners Medical Marijuana, Inc., Dixie Holdings,
LLC, AKA Dixie Elixirs, and Red Dice Holdings, LLC
respectfully petition for a writ of certiorari to review the
judgment of the United States Court of Appeals for the
Second Circuit in this case.
OPINIONS BELOW
The court of appeals’ opinion is reported at 80 F.4th
130. Pet.App.1a-22a. The district court’s opinion dismissing the civil RICO claim is unreported but available at
2021 WL 4173195. Pet.App.36a-59a.
(1)
2
JURISDICTION
The amended judgment of the court of appeals was
entered on August 22, 2023. This Court has jurisdiction
under 28 U.S.C. § 1254(1).
STATUTORY PROVISION INVOLVED
18 U.S.C. § 1964(c) provides in relevant part:
Any person injured in his business or property by
reason of a violation of section 1962 of this chapter may
sue therefor in any appropriate United States district
court and shall recover threefold the damages he sustains
and the cost of the suit, including a reasonable attorney’s
fee ….
STATEMENT
In the decision below, the Second Circuit held that
plaintiffs bringing civil suits under the Racketeer Influenced and Corrupt Organizations (RICO) Act can recover
for economic harms arising from personal injuries—here,
a garden-variety products-liability claim. In so doing, the
court widened an intractable and acknowledged 3-2 split
over the breadth of RICO’s civil cause of action. RICO
permits a plaintiff “injured in his business or property by
reason of” the defendant’s racketeering activity to sue for
treble damages and attorneys’ fees. 18 U.S.C. § 1964(c).
That “business or property” requirement “exclud[es] …
personal injuries.” RJR Nabisco, Inc. v. Eur. Cmty., 579
U.S. 325, 350 (2016). But the circuits are divided on
whether economic damages arising from personal injuries—like lost wages or medical expenses—support civil
RICO liability. Only this Court can resolve that split, and
this case is the ideal vehicle for doing so.
3
In the Sixth, Seventh, and Eleventh Circuits, civil
RICO’s “business or property” requirement firmly excludes economic harms arising from personal injuries.
Plaintiffs cannot replead personal-injury lawsuits as treble-damages RICO claims by focusing on the economic
consequences of their injuries. As the en banc Sixth Circuit has warned, permitting such lawsuits would deprive
RICO’s “business or property” requirement of “restrictive significance.” Jackson v. Sedgwick Claims Mgmt.
Servs., 731 F.3d 556, 565 (6th Cir. 2013) (en banc).
In open conflict, the Second Circuit below joined the
Ninth Circuit in greenlighting civil RICO claims for economic harms that flow from personal injuries. In those
circuits, so long as the plaintiff’s harm, standing alone, can
be characterized as one to “business or property,” it is irrelevant how that harm came about. Medical expenses
and lost wages can satisfy RICO’s injury to “business or
property” requirement, despite flowing entirely from personal injuries. In the decision below, the Second Circuit
let respondent’s products-liability claim proceed under
RICO because he lost his job after using a legal consumerwellness product that allegedly caused him to fail a workplace drug test. Though the Second Circuit accepted that
respondent’s harm “flow[ed] from a personal injury”—
“unwitting ingestion” of a drug—the court held that respondent’s lost job was “an injury to his business” no matter how it arose. Pet.App.7a-8a n.2, 11a.
Commentators and courts—including the Second
Circuit below—recognize this glaring split. Indeed, the
Sixth and Ninth Circuits have issued warring en banc
opinions on the question presented, and the Second Circuit expressly rejected other circuits’ approach. Only this
Court’s intervention can resolve the divide.
4
The question presented is critically important. RICO
is a frequently litigated federal statute that imposes treble damages and attorneys’ fees. The Second and Ninth
Circuits’ any-economic-injury-counts rule now governs
two of the most popular fora for RICO litigation, New
York and California. And RICO’s expansive venue rules
invite other plaintiffs to file in those circuits. Workplace
negligence can cause physical injuries leading to doctors’
bills. Defective products can cause health problems that
cost wages or jobs. If quintessential personal injuries
count as injuries to “business or property” just because
economic damage inevitably results, Congress’ careful
limitation on civil RICO claims would be toothless.
This case cleanly tees that circuit split up for resolution. Applying the Sixth, Seventh, and Eleventh Circuits’
rule barring RICO recovery for economic harms from
personal injuries, the district court dismissed the RICO
claim. But the Second Circuit joined the Ninth in permitting recovery for such harms and reinstated the claim. As
the district court observed, this case turns on a “narrow,
dispositive,” and “discrete question of statutory interpretation” that requires “little analysis of the underlying
facts.” Pet.App.29a, 31a. Had respondent sued in the
Sixth, Seventh, or Eleventh Circuits, his RICO claim
would have been dismissed. Instead, petitioners face a
federal trial with treble damages and attorneys’ fees on
the line. This arbitrariness is intolerable, especially for a
federal law as important as RICO.
A. Statutory Background
In 1970, Congress enacted RICO to combat “organized crime and its economic roots.” Russello v. United
States, 464 U.S. 16, 26 (1983). As RICO’s statutory findings explained, “organized crime in the United States
[was] a highly sophisticated, diversified, and widespread”
5
problem. Organized Crime Control Act of 1970, Pub. L.
No. 91-452, 84 Stat. 922, 922.
Congress’ solution was to attach hefty civil and criminal penalties to “racketeering activity,” which RICO defines to “encompass dozens of state and federal offenses,”
including mail and wire fraud. See RJR Nabisco, 579 U.S.
at 329-30; 18 U.S.C. § 1961(1). RICO specifically prohibits
four racketeering-related offenses like “receiv[ing] any
income … from a pattern of racketeering activity” or
“participat[ing] … in the conduct of [an] enterprise’s affairs through a pattern of racketeering activity.” 18
U.S.C. § 1962(a)-(d). Those acts are federal felonies punishable by up to 20 years in prison. Id. § 1963(a).
RICO also creates a civil cause of action for private
plaintiffs to recoup treble damages and attorneys’ fees
from wrongdoers. Id. § 1964(c). But that “civil remedy is
not coextensive” with RICO’s criminal provision. RJR
Nabisco, 579 U.S. at 350. Congress crafted RICO’s civil
provision to “extirpat[e] the baneful influence of organized crime in our economic life.” Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 488 (1985) (quoting 116 Cong. Rec.
25,190 (1970)). Thus, only plaintiffs “injured in [their]
business or property by reason of a violation of section
1962” may sue civilly. 18 U.S.C. § 1964(c). Though courts
sometimes refer to that requirement as “RICO standing,”
it is simply an element of civil RICO claims. Lerner v.
Fleet Bank, N.A., 318 F.3d 113, 129-30 (2d Cir. 2003).
Recognizing that Congress did not impose boundless
liability, this Court has cautioned against giving RICO an
overly “expansive reading.” Holmes v. Sec. Inv. Prot.
Corp., 503 U.S. 258, 266 (1992). Thus, the Court held that
a RICO plaintiff’s injury must have been proximately
caused by—i.e., “by reason of”—the defendant’s RICO violation. Id. at 268. And, of particular relevance here, this
6
Court has recognized that the phrase “business or property” “cabin[s] RICO’s private cause of action to particular kinds of injury—excluding, for example, personal injuries.” RJR Nabisco, 579 U.S. at 350.
B. Factual and Procedural Background
1. Hemp-based CBD, or cannabidiol, oil is a lawful,
“wildly popular” wellness product—so popular that some
have dubbed it the “new avocado toast.” Dr. Richard A.
Friedman, Opinion, Is CBD Helpful, or Just Hype?, N.Y.
Times, Dec. 26, 2018; Alex Williams, Why Is CBD Everywhere?, N.Y. Times, Oct. 27, 2018; see Pet.App.82a. To
date, 60% of U.S. adults have used a CBD product. Alena
Hall & Robby Brumberg, CBD Statistics, Data and Use,
Forbes (Sept. 7, 2023), https://tinyurl.com/3kzxju7f.
National chains from Kroger and Wegmans to CVS,
Walgreens, and Rite Aid sell myriad CBD products.1
CBD features in everything from oil-based supplements
to fizzy drinks to CBD-enhanced sports bras. Consumers
use CBD “for a wide variety of health issues,” including
epilepsy, insomnia, and anxiety as well as joint and muscle
pain and inflammation. Peter Grinspoon, M.D., Cannabidiol (CBD): What We Know and What We Don’t, Harv.
Health Publ’g (Sept. 24, 2021), https://tinyurl.com
/mr376e7t; see Brent A. Bauer, M.D., What Are the Benefits of CBD—and Is It Safe to Use?, Mayo Clinic,
https://tinyurl.com/yc7h87z5. That popularity has driven
the CBD industry to an estimated $6.4 billion market in
Diane Adam, Wegmans to Start Carrying cbdMD CBD Products,
Winsight Grocery Bus. (Oct. 3, 2022), https://tinyurl.com/2wx3ey6m;
Angelica Peebles & Lauren Hirsch, Kroger to Sell CBD Products in
Nearly 1,000 Stores, CNBC, June 11, 2019; Sean Williams, 9 Major
Retailers that Are Selling CBD Products, Motley Fool (June 3, 2019),
https://tinyurl.com/yury2zrf.
1
7
2022 and 16% projected annual growth. Grand View Research, Cannabidiol Market Size, Shares & Trends Analysis Report (2023), https://tinyurl.com/hc4x2v6p.
To state the obvious, CBD products are also quite different from marijuana, which is a prohibited substance
under federal law. Many CBD products, including the one
at issue here, come from hemp. While hemp and marijuana derive from the same plant, cannabis sativa, hemp has
been engineered to contain “low concentrations of THC,”
the psychoactive agent in marijuana. Pet.App.81a-82a (citation omitted). Put simply, “CBD does not cause a
‘high,’” Grinspoon, supra, and “exhibits no effects indicative of any abuse or dependence potential,” World Health
Org. Expert Comm. on Drug Dependence, Cannabidiol
(CBD) 5 (2018), https://tinyurl.com/3u3xuka5. Recognizing that distinction, Congress has long exempted portions
of the cannabis plant with low quantities of THC, like the
stalk of the mature plant, from federal law’s definition of
marijuana. 21 U.S.C. § 802(16) (2012). And in 2018, Congress removed hemp from the federal definition of marijuana entirely. 21 U.S.C. § 802(16)(B)(i) (2018).
This case involves a hemp-based CBD supplement
called Dixie X. Petitioner Red Dice Holdings LLC—a
joint venture of petitioners Medical Marijuana, Inc. and
Dixie Holdings LLC—manufactured Dixie X. Despite the
name, Medical Marijuana, Inc. sells only hemp-based
products fully compliant with federal drug laws, not marijuana. Accordingly, Dixie X was manufactured from mature hemp stalk and was therefore legally distributed under federal law even before Congress in 2018 entirely removed hemp from the federal definition of marijuana. See
Pet.App.73a-74a; 21 U.S.C. § 802(16) (2012).
Petitioners created Dixie X using a complex extraction and distillation process. Pet.App.83a. Petitioners
8
took medicinal hemp and distilled it to remove impurities—including any remaining THC—leaving a pure CBD
concentrate. Pet.App.83a. Petitioners then infused that
concentrate into an extract that users typically dissolve
under their tongue, which petitioners sold under the Dixie
X trademark. See Pet.App.83a.
2. Respondent Douglas Horn experienced chronic
pain and inflammation after a car accident. Pet.App.84a.
Unsatisfied with prescription medication, Horn began investigating natural remedies. Pet.App.4a.
As a commercial truck driver, Horn knew that he
faced random drug tests at work and could lose his job for
using marijuana. Pet.App.5a. Horn alleges that he first
learned of Dixie X from a magazine article around September 2012. Pet.App.4a. That article described Dixie
X’s “non-psychoactive” nature and “medicinal benefit[s].”
Pet.App.85a. The article also described Dixie X’s “proprietary extraction process,” which yielded “0% THC” and
complied with “federal guidelines for THC, which is
0.3%.” Pet.App.84a-85a. Horn alleges that he confirmed
that Dixie X did not contain THC by watching YouTube
videos, reading an online FAQ page, and having his wife
call a 1-800 number. Pet.App.85a-87a.
Later in September 2012, Horn allegedly bought and
used Dixie X. Pet.App.87a. In October 2012, he was selected for a routine drug test at work; he tested positive
for THC, and his employer fired him. Pet.App.87a.
3. Horn and his wife sued petitioners in federal court,
alleging nine causes of action. All centered around a falseadvertising theory whereby the Horns were allegedly
misled into thinking that Dixie X was THC-free, that
Dixie X in fact contained THC, and that Horn’s unwitting
consumption of THC cost him his job. Pet.App.2a-3a.
9
Eight claims arose under New York law: deceptive business practices, fraudulent inducement, strict products liability, breach of contract, breach of warranty, unjust enrichment, negligence, and negligent infliction of emotional
distress. Pet.App.87a-88a. The lone federal claim was a
civil RICO claim under 18 U.S.C. § 1964(c). Pet.App.88a.
In April 2019, Horn withdrew three of his state-law
claims, and the district court dismissed most of the remaining claims on summary judgment. Pet.App.95a,
113a. First, any damages Horn’s wife suffered were “too
attenuated” from any wrongful conduct, so the court dismissed all of her claims. Pet.App.105a, 111a, 113a. As to
Horn, the district court granted summary judgment to
petitioners on four of the state-law claims, holding that
Horn could not prove those claims as a matter of New
York law. Pet.App.96a-100a, 111a-113a. That left two
claims: Horn’s state-law fraudulent-inducement claim
and his civil RICO claim. Pet.App.113a.
The court later granted petitioners summary judgment on the RICO claim, agreeing with petitioners that
Horn’s RICO claim sought recovery for a personal injury—unwitting consumption of THC—and thus failed as
a matter of law. Pet.App.39a, 46a. The court defined
Horn’s injury as “the bodily invasion that [he] suffered
when he unwittingly ingested THC.” Pet.App.42a. Any
financial harm Horn suffered from his lost employment
derived from that “personal injury.” Pet.App.42a. That
was a problem, the court held, because RICO permits recovery only for injuries to “business or property”—not
“personal injuries.” Pet.App.39a-40a (citations omitted).
Following precedent from the Sixth, Seventh, and
Eleventh Circuits, the court held that “lost earnings or
wages are not recoverable” in a civil RICO suit “if they
flow from a personal injury.” Pet.App.41a-42a (citing
10
Jackson, 731 F.3d at 565-66; Evans v. City of Chicago, 434
F.3d 916, 926-27 (7th Cir. 2006), overruled on other
grounds by Hill v. Tangherlini, 724 F.3d 965, 967 n.1 (7th
Cir. 2013); and Grogan v. Platt, 835 F.2d 844, 848 (11th
Cir. 1988)). Here, because the only “connect[ion]” between Horn’s substantive RICO allegations and his financial harm was “a personal injury,” his RICO claim failed
as a matter of law. Pet.App.42a, 46a.
At Horn’s request, the district court entered partial
final judgment on the RICO claim under Federal Rule of
Civil Procedure 54(b) to permit an immediate appeal.
Pet.App.26a-27a. As the court explained, this “narrow,
dispositive,” and “discrete question of statutory interpretation” “would demand little analysis of the underlying
facts,” making immediate appeal appropriate.
Pet.App.29a, 31a.
4. The Second Circuit reversed. Horn did not contest
the district court’s holding that RICO excludes economic
harms resulting from personal injury, but argued that his
injury did not fall into that category. C.A. Horn Br. 911. The Second Circuit declined to address that contention, instead deciding only the “logically antecedent legal
question” of “whether § 1964(c) bars a plaintiff from suing
for injuries to business or property simply because they
flow from, or are derivative of, a personal injury.”
Pet.App.8a n.2. The Second Circuit rejected any such bar,
weighing in on an acknowledged circuit split.
The court recognized that “the en banc Sixth Circuit,”
along with the Seventh and Eleventh Circuits, “denies
RICO standing to any plaintiff whose pecuniary loss
‘flows from or is derivative of,’ an antecedent personal injury.” Pet.App.11a-12a & n.5 (citation omitted). But the
Second Circuit declared itself “not persuaded,” dismissing those decisions as “backwards.” Pet.App.12a n.5, 13a.
11
Instead, the Second Circuit sided with “the en banc
Ninth Circuit” and held that civil RICO permits recovery
for injuries that “flow from, or are derivative of, a personal injury.” Pet.App.11a, 13a. In the Second Circuit’s
view, “the phrase ‘business or property’ focuses on the nature of the harm, not the source of the harm.”
Pet.App.15a. The court therefore found “no basis” to bar
recovery when “there is an antecedent personal injury.”
Pet.App.18a-19a. Because Horn suffered an economic injury when he “lost his job,” the Second Circuit held, Horn
could state a RICO claim even though his harm resulted
solely from his personal injury. Pet.App.10a-11a.
REASONS FOR GRANTING THE PETITION
This petition is the ideal vehicle for resolving an entrenched, well-recognized 3-2 circuit split over whether
RICO’s civil cause of action covers economic harms arising from personal injuries. Three circuits hold that civil
RICO’s “business or property” requirement excludes
such harms, permitting recovery only for direct injuries
to business or property. But two circuits hold that civil
RICO reaches any economic harms to someone’s business
or property, even if those harms stem from personal injuries. Those circuits thus let plaintiffs seek treble damages
for lost wages, medical expenses, and myriad other harms
flowing from personal injuries. The Second Circuit below
and many other circuits have acknowledged this split, yet
remain divided in opposing camps after multiple en banc
proceedings. Only this Court can break the logjam.
The question presented is important, recurring, and
squarely presented. The Second Circuit reinstated respondent’s RICO claim exclusively based on its holding
that civil RICO applies to economic harms arising from
12
personal injuries. Two of the largest fora for RICO litigation—the Second and Ninth Circuits—now apply an expansive view of RICO-recoverable injuries, allowing
countless claims that three other circuits reject. This
Court should grant certiorari to restore uniformity to this
frequently litigated federal statute.
I.
The Circuits Are Divided 3-2 Over RICO’s Application to
Economic Harms from Personal Injuries
Three circuits hold that RICO’s “business or property” requirement bars suits for economic harms that
arise from personal injuries. Two circuits hold the opposite and allow such RICO claims. Absent this Court’s intervention, the split will persist indefinitely and produce
grossly disparate consequences based on geography.
1. The Sixth, Seventh, and Eleventh Circuits hold
that RICO’s civil cause of action does not encompass economic harms arising from personal injuries.
The Sixth Circuit resolved this issue en banc and held
that “both personal injuries and pecuniary losses flowing
from those personal injuries fail to confer relief under
§ 1964(c).” Jackson, 731 F.3d at 565-66; accord Brown v.
Ajax Paving Indus., Inc., 752 F.3d 656, 657 (6th Cir.
2014). The Sixth Circuit “exclud[es] damages ‘arising directly out of ’ a personal injury” to give “restrictive significance [to] the phrase ‘business or property.’” Jackson,
731 F.3d at 565. Because “personal injuries often lead to
monetary damages,” a contrary rule would let plaintiffs
recast personal injuries as economic harms and plead
around RICO’s “business or property” requirement. Id.
Thus, the en banc Sixth Circuit dismissed RICO
claims based on work-related injuries where the plaintiffs’
employer allegedly committed fraud to deny workers’
13
compensation benefits for those injuries. Id. at 558.
Though the workers sued for lost wages and medical expenses, those economic harms “merely reflect[ed] the pecuniary losses associated with the personal injury” and
were not actionable under civil RICO. Id. at 566.
The Seventh Circuit follows the same rule: “The
terms ‘business or property’ are, of course, words of limitation which preclude recovery for personal injuries and
the pecuniary losses incurred therefrom.” Doe v. Roe, 958
F.2d 763, 767 (7th Cir. 1992); accord Ryder v. Hyles, 27
F.4th 1253, 1257 (7th Cir. 2022); Evans, 434 F.3d at 92526. “Most personal injuries … will entail some pecuniary
consequences,” that court explained. Doe, 958 F.2d at 770.
Thus, treating “the economic aspects of such injuries …
as injuries to ‘business or property’” would evade RICO’s
limitation on qualifying injuries. Id.
Applying that rule, the Seventh Circuit rejected a
civil RICO claim against a sexual harasser who caused the
plaintiff severe “emotional distress.” Id. Though the
plaintiff sued for economic damages—“loss of earnings,”
the cost of a security system, and attorneys’ fees—those
harms were “plainly derivatives of her emotional distress”
and thus “personal injuries which are not compensable
under RICO.” Id. Likewise, the Seventh Circuit denied
civil RICO recovery for “malicious prosecution and false
imprisonment”—“traditional tort claims which result in a
personal injury.” Evans, 434 F.3d at 927. While that
plaintiff focused his claim on “[t]he loss of income as a result of being unable to pursue employment opportunities
while allegedly falsely imprisoned,” that lost income was
“an indirect, or secondary effect, of the personal injuries.”
Id. at 926-27. So the lost income was not “a cognizable
injury to ‘business or property’” under RICO. Id. at 927.
14
The Eleventh Circuit also precludes “recovery for the
economic aspects of personal injuries.” Grogan, 835 F.2d
at 845; accord Blevins v. Aksut, 849 F.3d 1016, 1021 (11th
Cir. 2017); Pilkington v. United Airlines, 112 F.3d 1532,
1536 (11th Cir. 1997). As that court has explained, “the
ordinary meaning of the phrase ‘injured in his business or
property’ excludes personal injuries, including the pecuniary losses therefrom.” Grogan, 835 F.2d at 847. Had
Congress wanted to cover all financial losses, Congress
“could have enacted a statute referring to injury generally, without any restrictive language.” Id. (citation omitted). Instead, Congress limited civil RICO’s reach to injuries in “business or property.” Id. at 846.
The Eleventh Circuit has thus deemed claims for severe harassment that led to a leave of absence from work
“not cognizable under RICO.” Pilkington, 112 F.3d at
1536. That court likewise rejected civil RICO claims for
murder even when the plaintiffs targeted the “real economic consequences” to the victims’ families, like lost income. Grogan, 835 F.3d at 846. Those “pecuniary aspects
of personal injury losses” are “nonrecoverable under
RICO.” Id. at 848.
2. In direct conflict, the Second and Ninth Circuits
allow civil RICO claims for collateral economic consequences of personal injuries.
The Second Circuit adopted that rule in the decision
below. The court “agree[d]” that civil RICO “excludes recovery for personal injuries.” Pet.App.13a. But the Second Circuit declared itself “not persuaded” by the Sixth,
Seventh, and Eleventh Circuit’s position and “reject[ed]
the antecedent-personal-injury bar.” Pet.App.13a. In the
Second Circuit’s view, “§ 1964(c) does not bar a plaintiff
15
from suing for injuries to business or property simply because those injuries flow from, or are derivative of, an antecedent personal injury.” Pet.App.22a.
The en banc Ninth Circuit has likewise held that
plaintiffs may recover for damage to a “property interest
valid under state law” even where that harm “result[s]
from a personal injury.” Diaz v. Gates, 420 F.3d 897, 900
(9th Cir. 2005) (en banc); accord Guerrero v. Gates, 442
F.3d 697, 707-08 (9th Cir. 2006). In the Ninth Circuit’s
view, “the personal injury” is “separate” from the subsequent “property injury.” Diaz, 420 F.3d at 902. Thus, the
en banc Ninth Circuit held that a plaintiff who suffered
“the personal injury of false imprisonment” stated a cognizable RICO injury. Id. That false imprisonment led to
the “property injury of interference with current or prospective contractual relations” because the plaintiff could
not work from jail, so the plaintiff could sue under RICO
for that “claimed financial loss.” Id. at 900-02.
3. The circuits widely recognize the conflict. The Second Circuit below cataloged the extant 3-1 split and
aligned itself with the Ninth Circuit, calling other circuits’
holdings “backwards.” Pet.App.11a-13a & n.5. The Seventh Circuit recognizes that its position “is at odds with
that of the United States Court of Appeals for the Ninth
Circuit.” Evans, 434 F.3d at 930 n.26. And the Ninth Circuit has rejected the Eleventh Circuit’s reasoning as
“flawed.” Diaz, 420 F.3d at 902; see id. at 908 (Gould, J.,
dissenting) (“[T]he majority creates a split with the Eleventh Circuit … and the Seventh Circuit.”). Lower courts
have repeatedly noted this unambiguous split too.2
E.g., Spadaro v. City of Miramar, 855 F. Supp. 2d 1317, 1353 n.30
(S.D. Fla. 2012) (“The Circuit Courts of Appeals are divided on this
2
16
Likewise, legions of commentators acknowledge that
the “circuits are currently split as to whether civil RICO
grants standing to those who have suffered a property
harm derived from a personal injury.” Patrick Wackerly,
Comment, Personal Versus Property Harm and Civil
RICO Standing, 73 U. Chi. L. Rev. 1513, 1513 (2006).3 Indeed, as Judge Rakoff has observed, the Seventh and
Ninth Circuits “addressed the same issue and reached a
different conclusion” on materially identical facts. Jed S.
Rakoff et al., RICO: Civil and Criminal Law and Strategy § 1.07[4] (Jan. 2023 update).4 Plaintiffs sued police officers for false imprisonment because they missed out on
issue.”); Aston v. Johnson & Johnson, 248 F. Supp. 3d 43, 50 & n.4
(D.D.C. 2017) (following “majority position” instead of the “unpersuasive,” “more expansive view of ‘business or property’ taken by the
Ninth Circuit”); Ryder v. Hyles, 2021 WL 7285358, at *3 (N.D. Ill.
July 29, 2021) (contrasting Seventh and Ninth Circuit precedent);
Miller v. York Risk Servs. Grp., 2013 WL 6442764, at *4 (D. Ariz. Dec.
9, 2013) (“[C]oncerns … discussed in the Sixth Circuit’s majority opinion [in] Jackson … do not find support under Ninth Circuit law.”).
Accord Jacob Poorman, Comment, Exercising the Passive Virtues
in Interpreting Civil RICO “Business or Property,” 75 U. Chi. L.
Rev. 1773, 1777 n.24 (2008) (“The circuits are divided … as to what
constitutes an excludable ‘personal injury.’”); Eric Lloyd, Comment,
Making Civil RICO “Suave”: Congress Must Act to Ensure Consistent Judicial Interpretations of the Racketeer Influenced and Corrupt Organizations Act, 47 Santa Clara L. Rev. 123, 124 (2007) (observing the “split between the Ninth Circuit and the Seventh and
Eleventh Circuits”); Current Circuit Splits: Criminal Matters, 2 Seton Hall Cir. Rev. 261, 265-66 (2005) (question presented on list of
“current circuit splits”).
3
Accord Reid J. Schar, 12 Bus. & Com. Litig. Fed. Cts. § 126:35 (5th
ed. Nov. 2022 update) (The Seventh Circuit “expressly disagreed with
the Ninth Circuit[.]”); Joel W. Mohrman et al., Recent Developments
in Business Litigation, 42 Tort Trial & Ins. Prac. L.J. 327, 350 (2007)
(“On similar facts, the Seventh Circuit reached a different result.”).
4
17
job opportunities while in jail. In the Ninth Circuit, the
plaintiff had a viable RICO claim. Diaz, 420 F.3d at 902.
In the Seventh Circuit, he did not. Evans, 434 F.3d at 926.
The circuit split is deeply entrenched, with no hope of
abating. Two circuits—the Sixth and the Ninth—have
gone en banc on the question presented and came out opposite ways. Jackson, 731 F.3d at 565-66; Diaz, 420 F.3d
at 900. Other circuits have hewed to their position after
considering cases on the other side. The Seventh Circuit
has rejected the Ninth Circuit’s acceptance of harms flowing from personal injuries as a “mischaracterization of the
RICO statute.” Evans, 434 F.3d at 930 n.26. Conversely,
the Second Circuit below rejected the Sixth, Seventh, and
Eleventh Circuit’s views as “backwards” and “not persua[sive].” Pet.App.11a-13a & n.5. Only this Court can
cure the conflict and restore uniformity to civil RICO, one
of the most widely litigated federal statutes.
II. The Question Presented Is Important, Recurring, and
Squarely Presented
1. Whether civil RICO applies to economic harms
arising from personal injuries is a question of exceptional
importance. Despite Congress’ “relatively narrow focus
upon ‘organized crime,’” H.J. Inc. v. Nw. Bell Tel. Co., 492
U.S. 229, 255 (1989) (Scalia, J., concurring in the judgment), RICO has “evolv[ed] into something quite different from the original conception of its enactors.” Sedima,
473 U.S. at 500. Today, “the majority of civil RICO cases”
have “no apparent connection to organized crime.” Anza
v. Ideal Steel Supply Corp., 547 U.S. 451, 472 (2006)
(Thomas, J., concurring in part). “[T]he prospect of treble
damages and attorney’s fees” offers plaintiffs a “strong
incentive” to replead claims that might have been brought
under other statutes or state law as federal RICO claims.
18
Sedima, 473 U.S. at 504 (Marshall, J., dissenting). As one
commentator puts it, civil RICO litigation is “a three-ring
circus.” Nicholas L. Nybo, Note, A Three Ring Circus: The Exploitation of Civil RICO, How Treble Damages Caused It, and Whether Rule 11 Can Remedy the
Abuse, 18 Roger Williams U. L. Rev. 19 (2013).
In the last five years, plaintiffs filed over 6,500 new
RICO cases. See Admin. Off. of the U.S. Cts., U.S. District Courts—Civil Cases Filed, by Nature of Suit tbl. 4.4
(2022), https://tinyurl.com/bd8pc86p. Any defendant that
arguably violates any of “dozens of state and federal offenses” faces potential treble-damages liability in federal
court. See RJR Nabisco, 579 U.S. at 330.
Permitting RICO claims for the economic harms of
personal injuries risks eliminating an otherwise critical
limitation on RICO’s scope. Virtually all personal injuries
produce some “monetary losses.” Evans, 434 F.3d at 927.
Thus, the Second and Ninth Circuits’ rule “opens the
RICO door to any plaintiff’s lawyer savvy enough to include an allegation that other wrongs lead” to monetary
harm, converting countless state-law personal-injury
claims into federal treble-damages claims. Diaz, 420 F.3d
at 914 (Gould, J., dissenting). Here, for example, Horn
has attempted to replead a products-liability claim that
failed under New York law into a federal RICO claim.
The universe of potential personal-injury-related
claims that could transform into RICO claims is vast, giving plaintiffs in two massively populous circuits—the Second and Ninth—every spur to creativity. As the cases underlying the circuit split illustrate, the question presented
has already recurred prolifically in lawsuits against defendants from bank robbers, Grogan, 835 F.2d at 845, to
19
divorce attorneys, Doe, 958 F.2d at 765, to soft-drink manufacturers, Jackson, 731 F.3d at 558. District courts in
the Ninth Circuit—including the Central and Northern
Districts of California—are already national leaders in
RICO filings. TRAC Reports, Anti-Racketeering Civil
Suits Jump in 2018 (Oct. 30, 2018), https://tinyurl.com
/3akvkcvu. Now that the expansive-liability camp includes the Second Circuit—where the Southern District
of New York already draws an enormous volume of RICO
claims, see id.—civil RICO claims will proliferate further.
Civil RICO’s expansive venue provision also invites
forum shopping. Plaintiffs can file RICO suits in any district where a defendant “resides, is found, has an agent,
or transacts his affairs.” 18 U.S.C. § 1965(a). Courts can
join other defendants with no connection to the forum
when “the ends of justice” so require. Id. § 1965(b). Given
the number of companies that do some business in the
Second or Ninth Circuits, those circuits’ plaintiff-friendly
rule risks becoming the nationwide norm.
Given RICO’s breadth and the frequency with which
plaintiffs pursue civil RICO claims, “clarity and predictability in RICO’s civil applications are particularly important.” H.J. Inc., 492 U.S. at 255 (Scalia, J., concurring
in the judgment). That concern is especially salient here,
where the issue is frequently case dispositive. Because
the question presented goes to whether the plaintiff has
stated an element of the cause of action, complaints that
would be dismissed in the Sixth, Seventh, and Eleventh
Circuits will proceed in the Second and Ninth.5
5
E.g., Grogan, 835 F.2d at 845, 848 (affirming dismissal “for failure
to state an injury to business or property” without “reach[ing] the
defendant’s other arguments”); Doe, 958 F.2d at 765, 767 (affirming
20
2. This case is the ideal vehicle to resolve the circuit
split. Following the Sixth, Seventh, and Eleventh Circuits’ rule, the district court dismissed Horn’s RICO
claim. Pet.App.41a-42a. The Second Circuit reversed
solely on the ground that harms resulting from personal
injuries are actionable. Pet.App.3a. In doing so, the Second Circuit waded right into the circuit split and expressly
sidestepped Horn’s narrower argument that his harm did
not flow from a personal injury. Pet.App.7a-8a n.2.
As the district court observed, “the underlying factual
record is largely irrelevant” to the question presented,
which is a “narrow, dispositive,” and “discrete question of
statutory interpretation.” Pet.App.29a, 31a. This case
therefore cleanly presents the question of whether civil
RICO applies to economic harms arising from personal injuries without any factual baggage. In the Sixth, Seventh,
and Eleventh Circuits, Horn’s civil RICO claim would
have been dismissed—as it was when the district court applied those circuits’ law. But because Horn sued in the
Second Circuit, petitioners now face potential treble damages and attorneys’ fees. This Court should grant certiorari to correct that stark, arbitrary disparity.
III. The Decision Below Is Incorrect
As this Court has recognized, RICO’s civil cause of
action does not apply to personal injuries because such
plaintiffs are not injured in their “business or property.”
RJR Nabisco, 579 U.S. at 350. Plaintiffs cannot evade
dismissal “on the grounds that [Doe’s complaint] did not allege an injury to ‘business or property’” because “RICO cannot encompass
such a claim”); Jackson, 731 F.3d at 562-63 (affirming dismissal because “plaintiffs ha[d] failed to allege that they were injured in their
business or property” and “declin[ing] to reach … other arguments
in support of the district court’s judgment” (cleaned up)).
21
that statutory limitation by seeking recovery for economic
harms that flow from personal injuries.
1. Civil RICO requires that the plaintiff be “injured
in his business or property by reason of” the defendant’s
racketeering activity. 18 U.S.C. § 1964(c). An “injury” is
a “wrong or damage done to another, either in his person,
rights, reputation, or property.” Black’s Law Dictionary
924 (Rev. 4th ed. 1968). “Business” includes “means of
material being and livelihood.” Id. at 248. And “property”
is an “exclusive right” “guaranteed and protected by the
government.” Id. at 1382. As this Court has noted in the
context of the Clayton Act, the phrase “business or property” is thus “restrictive.” Reiter v. Sonotone Corp., 442
U.S. 330, 338 (1979). That language necessarily excludes
“particular kinds of injur[ies],” including “personal injuries.” RJR Nabisco, 579 U.S. at 350; see Pet.App.13a.
Personal injuries are the antithesis of injuries to business or property. A “personal injury” is a “hurt or damage done to a man’s person … as distinguished from an
injury to his property or reputation.” Black’s Law, supra,
at 925. “[C]ommon law tort law” helps elucidate the scope
of “a ‘personal injury.’” United States v. Burke, 504 U.S.
229, 234 (1992) (citation omitted). Under tort law, the
“typical recovery in a personal injury case” includes “(a)
medical expenses, (b) lost wages, and (c) pain, suffering,
and emotional distress.” Comm’r v. Schleier, 515 U.S.
323, 329 (1995). Economic damages resulting from personal injuries, like medical expenses or the lost wages at
issue here, are therefore part of the personal injury—not
injuries to “business or property” covered by civil RICO.
Any other reading would deprive RICO’s “business or
property” requirement of “restrictive significance.” Jackson, 731 F.3d at 565. “[P]ersonal injuries often lead to
22
monetary damages.” Id. “[L]oss of consortium, loss of
security and peace, wrongful death and similar claims
sounding in tort” all produce “monetary losses.” Evans,
434 F.3d at 927.
If plaintiffs suffering any monetary harm can sue under civil RICO, Congress’ choice to limit the statute to
“business or property” injuries would be virtually meaningless. Countless state-law tort claims could be repleaded as federal treble-damages actions. Peanut allergy sufferers could bring RICO suits against food manufacturers for medical expenses if food labels fail to disclose that products were manufactured in a facility that
also processes peanuts. A company could use RICO
against a hot-air-balloon manufacturer if the manufacturer’s shoddy labor practices cause the balloon to crash,
injuring the company’s CEO and harming the company’s
bottom line. Customers could lob RICO claims against
casinos if the slippery casino floor causes customers to
break bones in a slip and fall, with the customer asserting
lost-wages damages for missed work.
RICO’s provenance confirms that civil RICO is not a
supercharged state tort statute. Congress “modeled”
RICO’s civil cause of action, including its “business or
property” requirement, “on the civil-action provision of
the federal antitrust laws, § 4 of the Clayton Act.”
Holmes, 503 U.S. at 267. The Clayton Act naturally focuses on direct economic injuries. Thus, in the antitrust
context, courts on both sides of the split recognize that
economic aspects of personal injuries, like medical expenses, are not “injur[ies] to business or property.” E.g.,
Or. Labs.-Emps. Health & Welfare Tr. Fund v. Philip
Morris Inc., 185 F.3d 957, 964 (9th Cir. 1999); Iron Workers Loc. Union No. 17 Ins. Fund v. Philip Morris Inc., 23
23
F. Supp. 2d 771, 785 (N.D. Ohio 1998). There is no basis
for reading that same language differently in RICO.
2. The Second Circuit’s contrary conclusion is unpersuasive. The Second Circuit started from the presumption that RICO’s exclusion of personal injuries is “implicit,” so that exclusion should be interpreted narrowly.
Pet.App.3a, 12a-13a, 15a, 17a-18a, 22a. But RICO’s “business or property” requirement appears center stage in
the text. Civil RICO expressly permits recovery only by
plaintiffs who have suffered “business or property” injuries. That language does not permit recovery for any
other kind of injury, including personal ones, as this Court
has observed. RJR Nabisco, 579 U.S. at 350. RICO’s
“business or property” requirement deserves a fair reading, just like any other statutory provision.
The Second Circuit reasoned that “business” includes
“employment,” so Horn’s lost job was “an injury ‘in his
business’” no matter how it arose. Pet.App.10a-11a. Because “the phrase ‘business or property’ focuses on the
nature of the harm, not the source of the harm,” the court
deemed it irrelevant that Horn lost his job due to the personal injury of unwittingly ingesting THC. Pet.App.15a.
But RICO is not indifferent to the source of the harm.
To decide whether a plaintiff has suffered a qualifying injury, courts do not look at “the injury … in isolation.”
Yegiazaryan v. Smagin, 599 U.S. 533, 545 (2023). They
examine “the circumstances surrounding the injury,” including how it “arose.” Id. Economic harms from personal injuries are part of the personal injury and thus not
injuries to “business or property” covered by RICO.
The Second Circuit claimed that its approach left
RICO’s “business or property” limitation with “restrictive
24
significance” because injuries like “mental anguish” and
“pain and suffering” cannot be recast as injuries to “business or property.” Pet.App.21a (citation omitted). But
the Second Circuit’s reasoning offers no basis for that
line-drawing. Personal-injury plaintiffs routinely recover
economic damages, i.e., money, for mental anguish or pain
and suffering, just as they recover economic damages for
lost wages or medical expenses. Schleier, 515 U.S. at 329.
“Money, of course, is a form of property.” Reiter, 442 U.S.
at 338. If the “nature of the harm” is all that matters, as
the Second Circuit thought, Pet.App.15a (emphasis omitted), then pain and suffering should equally be an injury
to “property” recoverable under RICO. Yet that would
nullify RICO’s “business or property” limitation, as the
Second Circuit seemingly recognized. Pet.App.21a.
Even spotting the Second Circuit’s premise that pain,
suffering, and the like are distinguishable from other aspects of personal injuries, virtually all personal injuries
have some economic aspect. If “mental anguish” requires
a day off work or “pain and suffering” leads to a doctor’s
office copay, those economic consequences would be injuries to business or property in the Second Circuit.
The Second Circuit found “significant” that RICO
limits liability by requiring that the plaintiff’s harm be “by
reason of” the defendant’s acts, i.e., that there be “proximate cause.” Pet.App.14a (citations omitted). In the Second Circuit’s view, excluding the economic harms of personal injuries “coopts that judgment” by “imposing a
more restrictive attenuation principle” in personal-injury
cases. Pet.App.14a. But the fact that RICO also imposes
a proximate-causation requirement cannot justify rendering the “business or property” requirement toothless.
25
The Second Circuit also worried that excluding economic harms flowing from personal injuries would prevent recovery for classic RICO predicate acts like murder
and kidnapping. Pet.App.16a-17a. But Congress purposefully limited RICO’s civil cause of action to injuries in
“business or property.” Murder and kidnapping are prosecutable under criminal RICO, which has no business or
property limitation. But Congress cast RICO’s civil net
more narrowly, focusing on only racketeering activity’s
direct economic harm. What the Second Circuit viewed as
a bug is a central feature of civil RICO’s more limited text.
CONCLUSION
The petition for a writ of certiorari should be granted.
Respectfully submitted,
ROY A. MURA
SCOTT D. MANCUSO
MURA LAW GROUP, PLLC
14 Lafayette Square
930 Rand Bldg.
Buffalo, NY 14203
Counsel for Medical Marijuana, Inc. and Red Dice Holdings, LLC
RICHARD E. LERNER
HANOCH SHEPS
MAZZOLA LINDSTROM LLP
1350 Avenue of the
Americas, Second Floor
New York, NY 10019
Counsel for Dixie Holdings, LLC
OCTOBER 3, 2023
LISA S. BLATT
Counsel of Record
SARAH M. HARRIS
AARON Z. ROPER
CLAYTON P. PHILLIPS
WILLIAMS & CONNOLLY LLP
680 Maine Avenue SW
Washington, DC 20024
(202) 434-5000
lblatt@wc.com
Counsel for Petitioners
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.