Amicus Curiae Brief — Medical Marijuana, Inc., et al., Petitioners v. Douglas J. Horn

No. 23-365

In the Supreme Court of the United States

MEDICAL MARIJUANA, INC., ET AL., Petitioners,

v.

DOUGLAS J. HORN

On Writ of Certiorari

to the United States Court of Appeals

for the Second Circuit

BRIEF FOR CHAMBER OF COMMERCE OF

THE UNITED STATES OF AMERICA,

PRODUCT LIABILITY ADVISORY COUNCIL,

AND AMERICAN TORT REFORM

ASSOCIATION AS AMICI CURIAE

SUPPORTING PETITIONERS

GENE C. SCHAERR

CRISTINA MARTINEZ SQUIERS

SCHAERR | JAFFE LLP

1717 K Street NW

Suite 900

Washington, DC 20006

Telephone: (202) 787-1060

JONATHAN D. URICK

AUDREY A. BECK

U.S. CHAMBER LITIGATION

CENTER

1615 H Street, NW

Washington, DC 20062

Telephone: (202) 463-5337

JULY 16, 2024

DONALD M. FALK

Counsel of Record

SCHAERR | JAFFE LLP

Four Embarcadero Center

Suite 1400

San Francisco, CA 94111

Telephone: (415) 562-4942

dfalk@schaerr-jaffe.com

H. SHERMAN JOYCE

LAUREN SHEETS JARRELL

AMERICAN TORT REFORM

ASSOCIATION

110 Connecticut Ave., NW

Washington, DC 20034

Counsel for Amici Curiae

TABLE OF CONTENTS

TABLE OF AUTHORITIES ........................................ ii

INTEREST OF AMICI CURIAE ................................ 1

INTRODUCTION AND SUMMARY OF

ARGUMENT ............................................................ 3

ARGUMENT ................................................................ 5

I.

Permitting Private Plaintiffs To

Recover Damages From Personal

Injuries Conflicts With RICO’s Plain

Text. ............................................................. 5

II.

Personal Injuries Are Outside

RICO’s Remedial Purpose. ........................ 14

III.

An Unduly Expansive Reading Of

RICO Will Harm Businesses And

Create A Flood of Litigation...................... 19

CONCLUSION .......................................................... 25

ii

TABLE OF AUTHORITIES

Cases

Page(s)

Agency Holding Corp. v. Malley-Duff &

Assocs., Inc., 483 U.S. 143 (1987) ............................ 6

Al-Sadhan v. Twitter Inc.,

2024 WL 536311 (N.D. Cal. Feb. 9, 2024)............. 22

Ambach v. French,

167 Wash. 2d 167, 216 P.3d 405 (2009) ................ 13

Anza v. Ideal Steel Supply Corp.,

547 U.S. 451 (2006) .......................................... 14, 17

Beerman v. Toro Mfg. Corp.,

1 Haw. App. 111, 615 P.2d 749 (1980) .................. 13

Berber v. Wells Fargo Bank, N.A.,

2018 WL 10436236 (S.D. Fla. May 24, 2018) ......... 9

Carcieri v. Salazar,

555 U.S. 379 (2009) ................................................ 13

Comcast Corp. v. Behrend,

569 U.S. 27 (2013) .................................................. 24

Diaz v. Gates,

420 F.3d 897 (9th Cir. 2005) .............................. 3, 17

Doe v. Roe,

958 F.2d 763 (7th Cir. 1992) .................................. 21

Drake v. B.F. Goodrich Co.,

782 F.2d 638 (6th Cir. 1986) .................................. 20

Fischer v. United States,

144 S. Ct. 2176 (2024) .............................................. 9

Foster v. United States,

303 U.S. 118 (1938) ................................................ 15

iii

Genty v. Resolution Trust Corp.,

937 F.2d 899 (3d Cir. 1991) ............................. 14, 20

Grogan v. Platt,

835 F.2d 844 (11th Cir. 1988) .................................. 8

H.J. Inc. v. Northwestern Bell Telephone Co.,

492 U.S. 229 (1989) ................................................ 14

Hemi Group, LLC v. City of New York,

559 U.S. 1 (2010) .............................................. 17, 18

Holmes v. Securities Investor

Protection Corp., 503 U.S. 258 (1992) ......... 6, 16, 18

In re Hydrogen Peroxide Antitrust Litig.,

552 F.3d 305 (3d Cir. 2008) ................................... 23

Jackson v. Sedgwick Claims Mgmt.

Servs., Inc., 731 F.3d 556 (6th Cir. 2013).............. 21

James v. Meow Media, Inc.,

90 F. Supp. 2d 798 (W.D. Ky. 2000) ...................... 21

Leyva v. Medline Industries, Inc.,

716 F.3d 510 (9th Cir. 2013) .................................. 24

Morrison v. Syntex Laboratories, Inc.,

101 F.R.D. 743 (D.D.C. 1984) .......................... 19, 20

Muldoon v. DePuy Orthopaedics, Inc.,

2024 WL 1892907 (N.D. Cal. Apr. 30, 2024)......... 21

Olean Wholesale Grocery Cooperative, Inc.

v. Bumble Bee Foods, LLC,

31 F.4th 651 (9th Cir. 2022) .................................. 24

Reaugh v. Inner Harbour Hosp., Ltd.,

214 Ga. App. 259, 447 S.E.2d 617 (1994) ............ 8, 9

iv

Reiter v. Sonotone Corp.,

442 U.S. 330 (1979) ............................ 6, 7, 11, 13, 16

Reves v. Ernst & Young,

507 U.S. 170 (1993) ................................................ 15

RJR Nabisco, Inc. v. European Community,

579 U.S. 325 (2016) ........................................ 5, 6, 12

Sackett v. EPA,

598 U.S. 651 (2023) ................................................ 10

Schrader v. Wynn Las Vegas, LLC,

2020 WL 8513790 (D. Nev. Dec. 9, 2020).............. 21

Sedima, S.P.R.L. v. Imrex Co., Inc.,

473 U.S. 479 (1985) ...................... 3, 5, 11, 15, 16, 19

TransUnion LLC v. Ramirez,

594 U.S. 413 (2021) ................................................ 23

TRW Inc. v. Andrews,

534 U.S. 19 (2001) .................................................... 8

Urie v. Thompson,

337 U.S. 163 (1949) .................................................. 8

Wal-Mart Stores, Inc. v. Dukes,

564 U.S. 338 (2011) ................................................ 24

Wos v. E.M.A. ex rel. Johnson,

568 U.S. 627 (2013) ................................................ 10

Statutes

18 U.S.C. §1961 ......................................................... 14

18 U.S.C. §1964 ......... 4, 5, 6, 10, 11, 12, 16, 18, 20, 23

Clayton Act, 15 U.S.C. §15 .................................... 6, 11

Organized Crime Control Act of 1970,

Pub. L. No. 91-452, 84 Stat. 922.............................. 3

v

Other Authorities

Black’s Law Dictionary (12th ed. 2024) ...................... 9

Ethan M. Posner,

Clarifying A “Pattern” of Confusion:

A Multi-Factor Approach to Civil

RICO’s Pattern Requirement,

86 Mich. L. Rev. 1745 (1988) ................................. 22

Antonin Scalia & Bryan A. Garner,

Reading Law: The Interpretation of

Legal Texts (2012).................................................... 7

Patrick Wackerly,

Personal versus Property Harm

and Civil RICO Standing,

73 U. Chi. L. Rev. 1513 (2006)............................... 22

INTEREST OF AMICI CURIAE 1

The Chamber of Commerce of the United States of

America is the world’s largest business federation. It

represents approximately 300,000 direct members and

indirectly represents the interests of more than three

million companies and professional organizations of

every size, in every industry sector, and from every

region of the country. An important function of the

Chamber is to represent the interests of its members

in matters before Congress, the Executive Branch, and

the state and federal courts. To that end, the Chamber

regularly files amicus curiae briefs in cases that raise

issues of concern to the nation’s business community.

The Product Liability Advisory Council, Inc.

(PLAC) is a non-profit corporation with approximately

90 corporate members representing a broad crosssection of American industry. These companies seek to

contribute to the improvement and reform of the law

in the United States and elsewhere, with emphasis on

the law governing the liability of product manufacturers and others in the supply chain. Since 1983,

PLAC has filed over 1,100 briefs as amicus curiae in

both state and federal courts, including this Court,

presenting the broad perspective of product manufacturers seeking fairness and balance in the development and application of the law as it affects product

manufacturers and suppliers.

1 No counsel for any party authored this brief in whole or in

part and no entity or person, aside from amici curiae, their

members, or their counsel, made any monetary contribution

intended to fund the preparation or submission of this brief.

2

The American Tort Reform Association (ATRA) is a

broad-based coalition of businesses, corporations,

municipalities, associations, and professional firms

that have pooled their resources to promote reform of

the civil justice system with the goal of ensuring

fairness, balance, and predictability in civil litigation.

For more than three decades, ATRA has filed amicus

briefs in cases involving important liability issues.

This case is of great concern to amici because the

broad rule adopted below would dramatically increase

businesses’ exposure and liability under the Racketeer

Influenced and Corrupt Organizations Act (RICO).

Virtually all products-liability claims (and a large

proportion of tort claims in general) involve allegations that a personal injury resulted in some pecuniary

harm. Permitting RICO actions to rest on personal

injuries might allow tort plaintiffs to add a RICO claim

to their lawsuits whenever they could plead the

repeated use of a channel of interstate commerce.

Confining the enhanced remedies available under

RICO to the scope intended by Congress is of utmost

importance to amici and their members.

3

INTRODUCTION AND

SUMMARY OF ARGUMENT

This is not a case about a “defect” in statutory

drafting, as the Second Circuit put it. Pet. App. 20a. It

is instead about poor statutory interpretation. In

contrast with some of this Court’s prior cases under

the Racketeer Influenced and Corrupt Organizations

Act (RICO), this case concerns Congress’s clearly

expressed, sound limits on a statutory cause of action.

Those limits should be enforced rather than construed

away.

Congress passed RICO in 1970 to “seek the

eradication of organized crime in the United States.”

Organized Crime Control Act of 1970, Pub. L. No. 91452, 84 Stat. 922, 923 (Statement of Findings and

Purpose). By the 1980s, RICO’s private civil action

became extremely popular and commonplace in

lawsuits having nothing to do with “mobsters and

organized criminals.” Sedima, S.P.R.L. v. Imrex Co.,

Inc., 473 U.S. 479, 499 (1985). The Court concluded

that this evolution was the result of RICO’s breadth,

so that Congress was responsible for correcting the

statute’s capacious language and expansive application. Ibid. In that light, policy concerns about the

statute’s far reach could not justify the atextual

“racketeering injury” requirements the Second Circuit

imposed on plaintiffs. Id. at 499-500.

The decision below relied extensively on Sedima,

see Pet. App. 10a, 19a–20a, as did the Ninth Circuit

when it similarly concluded that RICO allows certain

personal-injury plaintiffs to recover RICO damages.

See Diaz v. Gates, 420 F.3d 897, 901 (9th Cir. 2005)

(en banc) (per curiam). But this reliance is misplaced.

4

The only similarity between the standing inquiry

in Sedima and the injury inquiry here is that the

courts of appeals again went beyond the text of RICO’s

civil-remedies provision, this time expanding on the

text to allow plaintiffs to recover damages flowing

from personal injuries, rather than restricting

recovery in line with the statutory limits. In Sedima,

this Court determined that the identified policy and

purpose concerns were at odds with the statute’s text.

Here, in contrast, RICO’s text expressed the statutory

purpose and accords with sound policy.

First, the statute’s text creates a clear categorical

limitation on the types of injuries covered—those to

“business or property by reason of” the RICO violation

itself. 18 U.S.C. §1964(c). That language leaves no

room for backdoor access to RICO remedies through

personal injuries that have downstream financial

consequences.

Second, although RICO is a broad statute with a

liberal-construction clause, the restrictive text of the

injury provision in §1964(c) should be read to effectuate the statute’s purpose—to remedy economic harms

from patterns of criminal activity. Allowing personalinjury plaintiffs to pursue garden-variety tort claims

under RICO would turn the law into a general federal

tort statute.

Finally, extending RICO remedies to claims based

on personal injuries would have devastating consequences for businesses that would face costly discovery

and the risk of treble damages and attorney’s fees for

conduct beyond RICO’s purview. In addition, the

resulting conflation of injury and damages inquiries

5

could have deleterious spillover effects in other areas

of the law, including class certification.

All of these reasons—the plain text, the purpose of

RICO, and the practical consequences—warrant

reversal and a clear statement that the indirect effects

of personal injuries are not injuries to “business or

property” within the meaning of the statute.

ARGUMENT

I.

Permitting Private Plaintiffs To Recover

Damages From Personal Injuries Conflicts

With RICO’s Plain Text.

It is critical that businesses in the United States be

able to rely on the ordinary meaning of statutory

language. Section 1964(c) states that “[a]ny person

injured in his business or property by reason of a”

RICO violation is entitled to treble damages and

attorney’s fees. 18 U.S.C. §1964(c). As a matter of

common usage, the restrictive phrase “business or

property” limits “RICO’s private cause of action to

particular kinds of injury—excluding, for example,

personal injuries.” RJR Nabisco, Inc. v. European

Community, 579 U.S. 325, 350 (2016); see also Sedima,

473 U.S. at 509 (Marshall, J., dissenting) (“business or

property” restriction “excludes recovery for personal

injuries”). By “excluding … personal injuries” from

civil RICO’s scope, the Court necessarily excluded all

damages that flow from those excluded injuries. In

contrast with proposed limits on civil RICO based

solely in policy, this limit is compelled by the statutory

text. Any other reading of the phrase renders the

limiting language meaningless.

6

1. Congress modeled §1964(c) on the private civil

provision in the Clayton Act, 15 U.S.C. §15. See Agency

Holding Corp. v. Malley-Duff & Assocs., Inc., 483 U.S.

143, 150–151 (1987). The two provisions are nearly

identical. As this Court observed, “both statutes aim

to compensate the same type of injury.” Ibid.

(emphasis added). And that sole compensable type of

injury is “economic injury.” Id. at 151. “[C]abining

RICO’s private cause of action” in this way, RJR

Nabisco, 579 U.S. at 350, accords both with the plain

language of the statute and with the legitimate

expectations of businesses that certain types of

conduct, while potentially compensable under state

tort law, do not trigger liability for “threefold”

damages plus attorney’s fees under §1964(c).

Addressing the Clayton Act, this Court recognized

that, because “Congress must have intended to

exclude some class of injuries by the phrase ‘business

or property,’” the Act’s civil-remedies provision

“exclude[s] personal injuries.” Reiter v. Sonotone

Corp., 442 U.S. 330, 339 (1979). The same is true for

RICO’s identical civil-remedies provision. Indeed,

when this Court imported the antitrust laws’

proximate-cause requirement into RICO, the Court

“fairly credit[ed] the 91st Congress, which enacted

RICO, with knowing the interpretation federal courts

had given the words earlier Congresses had used first

in §7 of the Sherman Act, and later in the Clayton

Act’s §4.” Holmes v. Securities Investor Protection

Corp., 503 U.S. 258, 268 (1992). Here as in Holmes,

because the Congress chose the same words used in

the antitrust laws, the Court “can only assume it

intended them to have the same meaning.” Ibid.; see

7

Antonin Scalia & Bryan A. Garner, Reading Law: The

Interpretation of Legal Texts 322–326 (2012)

(discussing the prior-construction canon).

2. In deciding in Reiter that the “business or

property” terminology excluded recovery for personal

injuries, this Court recognized that the statutory

language limited recoveries to economic injuries.

Reiter, 442 U.S. at 339. Although the term “property”

expands the scope of relief beyond injury to a

“business,” each term serves to limit compensable

injuries to direct economic harms. Thus, the Court

contrasted “personal injuries suffered,” which are not

injuries to “business or property,” with “a consumer’s

monetary injury arising directly out of a retail

purchase,” which are. Ibid. (emphasis added). Rather

than disavow its precedent equating injury to

“business or property” with “commercial interests,” id.

at 341–342 (citing Hawaii v. Standard Oil Co. of

California, 405 U.S. 251, 264 (1972)), the Court

explained that “commercial” encompassed direct

injuries to property, including a consumer’s

pocketbook. As the Court put it, consumers have

“sound commercial interests” in not overpaying for

products and services. Id. at 342. It is those

“commercial interests” that the remedial statutes

protect, irrespective of the identity of the plaintiff.

Rather than recognizing the purpose and context of

the “business or property” formulation, the court

below instead parsed each element of that phrase in

isolation, Pet. App. 9a, both disregarding the terms’

“restrictive significance,” Reiter, 442 U.S. at 339, and

straining to expand the reach of each term. That

8

approach runs afoul of fundamental canons of

statutory construction.

For example, under the expressio unius principle,

Congress’s explicit inclusion of a limited rule is an

implicit exclusion of a more general rule. TRW Inc. v.

Andrews, 534 U.S. 19, 28 (2001). If Congress wanted

to include the downstream damages from personal

injuries, it could and would have used different

language. Congress could have chosen to provide a

remedy for “any person injured in his person, business,

or property.” Or Congress could have placed no limits

on compensable injury by simply omitting the phrase

“business or property” and instead providing a remedy

for any “person injured by reason of” a RICO violation.

See Grogan v. Platt, 835 F.2d 844, 846 (11th Cir.

1988).

When Congress uses unmodified “any injury”

language, recovery for personal injuries is permissible.

For example, in Urie v. Thompson, 337 U.S. 163, 181

(1949), this Court held that the broad “any injury”

language in the Federal Employers’ Liability Act

permitted recovery for “every injury” because the

words of the statute did not restrict “the cause of

injury” or “the particular kind of injury resulting.”

Indeed, that is how Georgia’s legislature drafted its

state RICO statute, which provides a civil cause of

action to “[a]ny person who is injured by reason of any

violation.” Reaugh v. Inner Harbour Hosp., Ltd., 214

Ga. App. 259, 264, 447 S.E.2d 617 (1994). The Georgia

courts accordingly have held that the law allows

recovery for damages flowing from personal injuries

precisely because, “[u]nlike the federal act,” the state

9

law “does not limit damages to injuries to business or

property.” Ibid.

The same is true for Florida’s RICO statute.

“Unlike the federal RICO statute, on which it was

patterned, the Florida RICO Act generally allows

recovery for ‘any person who has been injured’ by

reason of a pattern of predicate criminal activity.”

Berber v. Wells Fargo Bank, N.A., 2018 WL 10436236,

at *3 (S.D. Fla. May 24, 2018). Thus, “the Florida

statute does not expressly limit recovery—as does the

federal statute—to persons who have suffered injury

to their ‘business or property,’ language which has

been interpreted to exclude economic losses arising out

of personal injuries.” Ibid.

Similarly, “the canon of noscitur a sociis teaches

that a word is given more precise content by the

neighboring words with which it is associated.”

Fischer v. United States, 144 S. Ct. 2176, 2183 (2024)

(cleaned up). This canon “avoid[s] ascribing to one

word a meaning so broad that it is inconsistent with

the company it keeps.” Id. at 2183–2184 (cleaned up).

Interpreting “property” and “business” as entirely

unrelated violates this canon by broadening those

words beyond the limit Congress sought to impose.

Take the word “business,” which according to the court

below includes anything related to an individual’s

“employment,” Pet. App. 10a, or the word “property,”

which even in its narrowest form includes “the right of

ownership in a material object.” Property, Black’s Law

Dictionary (12th ed. 2024) (quoting John W. Salmond,

Jurisprudence 423–424 (10th ed. 1947)). Reading

those words in isolation and to encompass nearly

anything that can be valued in cash would ignore the

10

broader context of Congress’s use of the phrase

“business or property” to limit compensable injuries to

economic harms. While “business” and “property” are

separate terms, they are related by their nexus to

economic rather than physical harm.

Finally, the Second Circuit’s interpretation

violates this Court’s rule, rooted in federalism, that

requires “Congress to enact exceedingly clear

language if it wishes to significantly alter the balance

between federal and state power.” Sackett v. EPA, 598

U.S. 651, 679 (2023) (rejecting “overly broad interpretation” of the Clean Water Act that “would impinge

on” traditional state authority to regulate land and

water use) (quoting United States Forest Service v.

Cowpasture River Preservation Ass’n, 590 U.S. 604,

621–622, 680 (2020)).

There is “no question” that tort law is a core aspect

of state law: “States possess the traditional authority

to provide tort remedies to their citizens as they see

fit.” Wos v. E.M.A. ex rel. Johnson, 568 U.S. 627, 639–

640 (2013) (cleaned up). Yet the court below interpreted §1964(c) to encompass any personal injury

claim that results in pecuniary harm. If affirmed by

this Court, that interpretation will result in the

transfer of a multitude of routine state tort lawsuits to

federal court as RICO cases. And plaintiffs will have

every incentive to make that shift to take advantage

of RICO’s treble damages, attorney’s fees, and liberal

venue provisions.

Such an affront to federalism requires a clear

expression of congressional intent that is entirely

lacking here: “If Congress had intended to provide a

federal forum for plaintiffs for so many common law

11

wrongs, it would at least have discussed it.” Sedima,

473 U.S. at 525 (Powell, J., dissenting). Yet Congress

never surfaced the notion of supplanting state tort law

when enacting RICO. See id. at 501 (Marshall, J.,

dissenting). Under the clear-statement rule, legislative silence precludes an inference of “congressional

intent to effect such fundamental changes” to the

balance of state and federal power. Ibid.

That “business or property” is disjunctive does not

justify a departure from these principles of statutory

construction. Much less does mere disjunction suggest,

as the court below would have it, Pet. App. 9a, that

Congress intended to embrace any injury that has

indirect economic effects. On the contrary, the

disjunctive phrase imposed explicit and articulable

limits on the type of injury that must occur “by reason

of” a RICO violation in order to support civil liability

under §1964(c). It is the harm to “business or

property”—the economic or “commercial interest”

recognized as the limit in Reiter—that the RICO

violation must cause. It is not enough that the RICO

violation causes “personal injuries” that have economic repercussions. Reiter, 442 U.S. at 339. As this

Court recognized in construing the same language in

the Clayton Act, although “‘business’ was not intended

to modify ‘property,’ nor was ‘property’ intended to

modify ‘business,’” the phrase as a whole “retains

restrictive significance.” Ibid. In RICO, as in the

Clayton Act, that “restrictive significance” excludes

damages from personal injuries.

For all these reasons, Congress’s choice of the

phrase “business or property” imposes a limiting rule

that excludes a more general rule that would allow

12

recovery for personal injuries that indirectly result in

any economic damage—as almost all do. The intrusion

of civil RICO into the innermost domain of state tort

law violates principles of federalism and affects all

businesses, and thus should be limited by the terms

Congress used.

3. Under the expansive reasoning below, §1964(c)

excludes only non-economic damages for personal

injuries. Pet. App. 12a–13a. In other words, if the

personal injury had any economic effects that could be

characterized as damages either to “business” or to

“property” broadly construed, then those damages—

trebled—are recoverable under the statute. Id. at 13a.

The Second Circuit further stated that the “business

or property” language is a limitation only “on the

nature of the harm, not the source of the harm.” Id. at

15a.

That logic is deeply flawed. If the civil-remedies

provision excludes personal injuries—as this Court

recognized in RJR Nabisco, 579 U.S. at 350—then it

excludes personal injuries full stop. As petitioners

explain (Br. 20–25), the nature of the harm directly

resulting from the alleged RICO violation here is

personal, physical injury. Congress’s choice of the

words “business or property” closed the door to

personal injuries. Only by conflating the injury

(personal) with some forms of resulting damages

(pecuniary) could the Second Circuit evade the textual

limits on compensable injury.

Using the downstream effects of personal injuries

as an indirect path to trebled recovery transforms the

plain text into a launching pad for remedial creativity.

That approach fails “to give effect, if possible, to every

13

word Congress used,” Carcieri v. Salazar, 555 U.S.

379, 391 (2009), and instead makes the chosen terms

into decorative signposts devoid of their intended

“restrictive significance.” Reiter, 442 U.S. at 339.

4. Even in the context of explicitly consumerfacing statutes, courts have recognized that the

inherent remedial limits imposed by the phrase

“business or property” exclude personal injuries and

damages arising from them.

For instance, the Washington Supreme Court, in

construing the State’s Consumer Protection Act, has

held that damages resulting from a personal injury are

not compensable as injuries to “business or property.”

Ambach v. French, 167 Wash. 2d 167, 169, 216 P.3d

405 (2009). Even if a personal injury results in

economic damage, the source of the injury is still

personal and thus excluded from the statute’s reach.

Ibid. “Where plaintiffs are both physically and economically injured by one act, courts generally refuse to

find injury to ‘business or property.’” Ibid. (collecting

cases). Thus, if a pecuniary injury “cannot be

separated from the personal injury,” a plaintiff cannot

recover for an injury to “business or property.” Id. at

169. A Hawaii appellate court similarly held that a

consumer protection statute allowing recovery for

injuries to “business or property” was not a “vehicle for

personal injury suits.” Beerman v. Toro Mfg. Corp., 1

Haw. App. 111, 117–118, 615 P.2d 749 (1980).

* * * * *

In sum, a wide variety of courts have held, inside

and outside the RICO context, that statutory language

limiting recovery to an injury to “business or property”

excludes personal injuries whether or not they may

14

ultimately result in economic damages as well. The

contrary conclusions of the Second and Ninth Circuits

are outliers that this Court should reject.

II. Personal Injuries

Remedial Purpose.

Are

Outside

RICO’s

Congress’s explicit goal in enacting RICO was “to

thwart the organized criminal invasion and acquisition of legitimate business enterprises and property.”

Genty v. Resolution Trust Corp., 937 F.2d 899, 918 (3d

Cir. 1991). In particular, a leading reason that

“Congress enacted RICO was to protect businesses

against competitive injury from organized crime.”

Anza v. Ideal Steel Supply Corp., 547 U.S. 451, 473

(2006) (Thomas, J., concurring in part and dissenting

in part) (citing Sedima, 473 U.S. at 494–500 (opinion

of the Court); id. at 500–523 (Marshall, J.,

dissenting)).

Although intervening precedents have relied on

broad statutory terms to weaken the nexus between

“racketeering activity” and organized crime, the

decision below severs the connection altogether—even

the connection with economic crimes without which

RICO would have few limits. If a qualifying injury to

“business or property” extends to personal injuries and

their consequences, RICO becomes an all-purpose

federal tort statute, available whenever a plaintiff can

plead at least two predicate acts that could be

characterized as wire fraud—as little as an

advertisement and an email. See H.J. Inc. v.

Northwestern Bell Telephone Co., 492 U.S. 229, 239

(1989); see also 18 U.S.C. §1961(5) (specifying that a

“pattern of racketeering activity” requires at least two

predicates committed within 10 years of each other).

15

RICO was designed to protect legitimate businesses

rather than victimize them. The reach of its treble

damages provision should be construed in light of the

restrictive purpose reflected in the statutory language.

1. The Second Circuit justified this departure from

the statute’s purpose, in part, because of RICO’s

liberal construction clause. Pet. App. 10a. But that

clause does not license a court to extend the statutory

text beyond its intended purpose.

Rather, any

interpretation of RICO’s text must be “liberally

construed to effectuate its remedial purposes.”

Sedima, 473 U.S. at 498 (emphasis added) (quoting

Pub. L. No. 91-452, § 904(a), 84 Stat. 974); see also

Foster v. United States, 303 U.S. 118, 120 (1938)

(“Courts should construe laws in harmony with the

legislative intent and seek to carry out legislative

purpose.”). As this Court previously made clear, the

liberal construction “clause obviously seeks to ensure

that Congress’ intent is not frustrated by an overly

narrow reading of the statute, but it is not an

invitation to apply RICO to new purposes that

Congress never intended.” Reves v. Ernst & Young,

507 U.S. 170, 183 (1993). That is especially so in light

of the federalism-based clear-statement rule discussed

above (at pp. 10–11).

In Sedima, this Court construed RICO broadly

because the text of the statute did not permit a

construction that would exempt those who engage in a

“pattern of specifically identified criminal conduct”

from civil RICO liability merely because they were

“respected businesses” rather than “archetypal, intimidating mobster[s].” 473 U.S. at 499. The statute was

defined in terms of predicate acts, and its text did not

16

support a separate requirement of racketeering injury.

Id. at 498–499, 500.

In contrast with Sedima, however, here there is

explicit language limiting the statute’s remedial scope

to an injury to “business or property.” And this Court

has held that the same remedial language, in the

acknowledged model for §1964(c), includes a variety of

direct economic injuries but excludes personal

injuries. Reiter, 442 U.S. at 339–342. When a statute

can be read to effectuate Congress’s purpose, that

construction should control.

2. In fact, in imposing a proximate-cause requirement on the civil-remedies provision, this Court

applied a narrower statutory interpretation to give

effect to RICO’s purpose. In Holmes, the Court noted

that RICO’s civil-remedies provision could, “of course,

be read to” allow plaintiffs to recover by showing only

but-for causation. 503 U.S. at 265–266. But the Court

said that such a broad “construction is hardly

compelled, however, and the very unlikelihood that

Congress meant to allow all factually injured plaintiffs

to recover persuade[d]” the Court “that RICO should

not get such an expansive reading.” Ibid. (footnote

omitted). Since Holmes, this Court has repeatedly

applied the proximate-cause requirement to underscore the need for a direct relationship between the

alleged criminal predicate acts and the injury to the

plaintiff’s “business or property”—“some direct relation between the injury asserted and the injurious

conduct alleged.” Id. at 268.

First in Anza v. Ideal Steel Supply Corp., the Court

stated: “When a court evaluates a RICO claim for

proximate causation, the central question it must ask

17

is whether the alleged violation led directly to the

plaintiff's injuries.” 547 U.S. 451, 461 (2006)

(emphasis added). Then in Hemi Group, LLC v. City of

New York, the Court rejected a foreseeability theory of

causation and reiterated that “the general tendency of

the law, in regard to damages at least, is not to go

beyond the first step,” and this general tendency

“applies with full force to proximate cause inquiries

under RICO.” 559 U.S. 1, 10 (2010) (cleaned up). This

Court further emphasized that its “precedents make

clear that in the RICO context, the focus is on the

directness of the relationship between the conduct and

the harm.” Id. at 12 (emphasis added). Those precedents “never even mention the concept of foreseeability.” Ibid.

Reading RICO to allow recovery for pecuniary

damages flowing from personal injuries would

undermine this Court’s narrowing of RICO’s causation

requirement, which to better effectuated Congress’s

purpose in passing the law. Indeed, in staking out the

position adopted and expanded by the decision below,

the Ninth Circuit relied on a view of RICO that

directly contradicts this Court’s emphasis on

“directness” in Anza and Hemi Group. In the Ninth

Circuit’s view, there was “no room in the statutory

language for an additional, amorphous requirement

that, for an injury to be to business or property, the

business or property interest have been the ‘direct

target’ of the predicate act.” Diaz, 420 F.3d at 901. But

the statute itself requires—and this Court’s

precedents confirm—that the injury to business or

property must directly result from the RICO violation,

whatever the violation’s intended “target.”

18

Although Diaz preceded this Court’s reaffirmance

of the “directness” limit in Hemi Group, the decision

below had the benefit of this Court’s latest guidance

on the point. Yet the Second Circuit nonetheless stated

that RICO’s proximate-cause requirement “is

generous enough to include the unintended, though

foreseeable, consequences of RICO predicate acts.”

Pet. App. 14a (quoting Diaz, 420 F.3d at 901). This

misconstrues the proximate-cause requirement, which

is designed as a limit on relief, not an open and

“generous” floodgate. As this Court explained, “the

notion of proximate cause reflects ‘ideas of what justice

demands, or of what is administratively possible and

convenient.’” Holmes, 503 U.S. at 268 (quoting W.

Page Keeton et al., Prosser and Keeton on Law of Torts

§ 41, p. 264 (5th ed. 1984)).

Moreover, as noted above, this Court has explicitly

rejected “foreseeability” as a basis to expand civil

liability under RICO. Hemi Group, 559 U.S. at 12. Yet

foreseeability, not directness, provides the conceptual

underpinning for the courts of appeals that

characterize personal injuries as injuries to “business

or property” that are compensable—trebled—under

§1964.

Thus, the court below was wrong to conclude that

excluding personal injuries works against RICO’s

proximate-cause requirement. See Pet. App. 14a–15a.

The opposite is true. Excluding downstream damages

from personal injuries (i.e., indirect harm) reinforces

this Court’s explicit admonition that RICO causation

requires “directness of the relationship between the

conduct and the harm.” Hemi Group, 559 U.S. at 12.

In contrast, including personal injuries contradicts

19

this Court’s precedent regarding the direct injury

requirement and expands RICO beyond its intended

purpose.

III. An Unduly Expansive Reading Of RICO Will

Harm Businesses And Create A Flood of

Litigation.

1. It is no secret that RICO’s civil provision has

“evolv[ed] into something quite different from the

original conception of its enactors.” Sedima, 473 U.S.

at 500. Construing the statute to provide recoveries for

personal injuries that have economic consequences

would accelerate the transformation of RICO into an

all-encompassing federal tort statute. Nearly every

personal injury case involves pecuniary harm. And

many can be pleaded to involve two or more instances

of wire fraud, whether through ads or emails. Were

this Court to affirm, Plaintiffs could replead numerous

claims, especially those involving products liability, as

injuries to “business or property” under RICO. And

RICO’s liberal remedial and venue provisions give

plaintiffs strong incentives to do. See Br. 30.

This is not just speculation, as the present case

makes clear. For an example of the consequences of

affirmance here, take the D.C. district court’s decision

in Morrison v. Syntex Laboratories, Inc., 101 F.R.D.

743 (D.D.C. 1984). The plaintiffs in that case brought

products-liability claims, including negligence and

breach of warranty, and later sought to amend their

complaint to assert a RICO cause of action. Id. at 744.

The plaintiffs claimed that certain officials and

employees of the defendant corporation engaged in a

scheme of fraudulent advertising of infant formula

through the mail. Ibid. And these new factual

20

allegations, according to the plaintiffs, supported the

addition of a RICO claim because of the asserted

economic damages from medical treatment and lost

future earnings incurred from the consumption of the

infant formula. Id. at 746.

The court rejected the proposed amendment

because the case involved “personal injury arising out

of a tort in a products liability case.” Id. at 744. That

prevented the plaintiffs from stating a RICO claim,

which requires instead an injury to “business or

property.” Id. at 746. In other words, the case stemmed

from the plaintiffs’ “alleged bodily injury,” and the

financial harm that resulted from that injury was “not

cognizable under RICO.” Ibid. The court went on to

explain that “[i]f RICO applied in this case, it would

most likely apply in every products liability case

involving” false representations. Id. at 744.

The Sixth Circuit’s decision in Drake v. B.F.

Goodrich Co., 782 F.2d 638 (6th Cir. 1986), provides

another illustration. The plaintiffs alleged that the

defendant had exposed employees to toxic chemicals,

causing various direct and indirect injuries. The court

of appeals rejected the notion that pecuniary harm

traceable to a personal injury constituted injury to

business or property under RICO. Id. at 644. See also

Genty, 937 F.2d at 913–914 (rejecting similar toxics

claim on other grounds).

Had Morrison and Drake been decided in accord

with the decision below, however, the RICO claims

would have gone forward. And if this Court were to

agree that personal injuries resulting in economic

harm are injuries to business or property under

§1964(c), nearly every products-liability or toxic

21

exposure plaintiff will be able to add a RICO count.

Indeed, as petitioners explain (Br. 25–26, 30–31), an

expansive injury standard would bring a dizzying

array of other personal injury claims within RICO. 2

In the Ninth Circuit, Diaz has provided expansive

access to civil RICO for some time. Though Diaz

required a nexus to a state-recognized property

right—a limitation not required by the decision

below—subsequent cases illustrate the broadening

effect of allowing personal injuries to support RICO

recoveries. The Northern District of California, for

example, invited a plaintiff to add allegations that a

hip replacement surgery with an allegedly defective

hip implant constituted an injury to “business or

property” under RICO. Muldoon v. DePuy Orthopaedics, Inc., 2024 WL 1892907, at *5 (N.D. Cal. Apr.

30, 2024). And a Nevada court found the injury

element satisfied in a putative class action concerning

sexual abuse, though the RICO claims ultimately were

dismissed on other grounds. Schrader v. Wynn Las

Vegas, LLC, 2020 WL 8513790, at *1, *4 (D. Nev. Dec.

9, 2020), report and recommendation adopted in part

and reversed in part sub nom. Schrader v. Wynn, 2021

WL 619376, at *6–8 (D. Nev. Feb. 17, 2021)

(dismissing RICO claims without prejudice based on

inadequate pleading of predicate acts). See also AlSadhan v. Twitter Inc., 2024 WL 536311, at *5, *15–

2 See, e.g., Jackson v. Sedgwick Claims Mgmt. Servs., Inc., 731

F.3d 556 (6th Cir. 2013) (en banc) (denial of workers

compensation claims for personal injuries); Doe v. Roe, 958 F.2d

763 (7th Cir. 1992) (fraudulent inducement of sexual relationship); James v. Meow Media, Inc., 90 F. Supp. 2d 798 (W.D. Ky.

2000) (video games allegedly responsible for school shooting),

aff’d, 300 F.3d 683 (6th Cir. 2002).

22

16 (N.D. Cal. Feb. 9, 2024) (RICO action time-barred

because injury to “business or property” occurred once

kidnapping deprived plaintiff of employment

opportunities).

2. These examples illustrate why endorsement by

this Court of the use of civil RICO to redress personal

injuries would reprise the “civil RICO explosion” of the

1980s. Patrick Wackerly, Personal versus Property

Harm and Civil RICO Standing, 73 U. Chi. L. Rev.

1513, 1515 (2006). Indeed, RICO claims were so

commonplace during that time that one lawyer

commented: “[I]t is so easy and tempting to allege a

RICO claim that counsel may commit malpractice if a

RICO claim is not made.” Ethan M. Posner, Clarifying

A “Pattern” of Confusion: A Multi-Factor Approach to

Civil RICO’s Pattern Requirement, 86 Mich. L. Rev.

1745, 1770 (1988). That will again become the case,

but for personal-injury claims rather than business

torts.

This massive increase in RICO claims will have

significant ramifications for the businesses named in

these lawsuits, which often will be relatively small

businesses like petitioners here, or professional

corporations as in Muldoon. RICO allows for broad

discovery, which will pressure defendants to settle

rather than spend exorbitant amounts of time and

money on invasive discovery. See ibid. RICO claims

also increase settlement pressure because defendants

fear “being labeled a racketeer.” Id. at 1770–1771

These financial and reputational pressures will exist

no matter how baseless the lawsuit turns out to be

once the facts are subject to scrutiny.

23

The increase in litigation will also harm

consumers. The expenses necessary to litigate or settle

cases will increase the costs of doing business. And

those costs ultimately will be passed on to customers.

Thus, expanding civil RICO to compensate personal

injuries thrice over will not impede organized

criminals. Instead, legitimate businesses and their

customers will bear the outsized costs of litigating new

RICO claims.

3. But that is not the only practical implication of

the rule adopted below. As petitioners explain (Pet. Br.

15–17, 22–25), the Second Circuit conflated

compensable injury—which §1964(c) explicitly

restricts—with recoverable damages. In essence, the

decision below holds that a plaintiff satisfies a

requirement of injury to “business or property”

whenever physical injury to a person also results in

some kind of economic damages.

But those two concepts are distinct throughout the

law, and often are articulated as separate elements of

claims, including under the antitrust laws. E.g., In re

Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 311

(3d Cir. 2008). In addition, injury is an element of

Article III standing, see, e.g., TransUnion LLC v.

Ramirez, 594 U.S. 413, 423 (2021), while damages are

not (most obviously because plaintiffs may have

standing to pursue injunctive relief against imminent

but not-yet-realized harm).

A holding by this Court approving the conflation of

injury and damages under RICO likely would have

spillover effects into other areas of the law. To take

only one example, in the class-certification context,

some courts of appeals have declared that “the

24

presence of individualized damages cannot, by itself,

defeat class certification under Rule 23(b)(3).” Leyva v.

Medline Industries, Inc., 716 F.3d 510, 514 (9th Cir.

2013). But see Comcast Corp. v. Behrend, 569 U.S. 27,

34 (2013) (without an adequate common method of

calculating damages, “[q]uestions of individual

damage calculations will inevitably overwhelm

questions common to the class”); Wal-Mart Stores, Inc.

v. Dukes, 564 U.S. 338, 349–350 (2011) (“Commonality

requires the plaintiff to demonstrate that the class

members have suffered the same injury.” (cleaned

up)). These courts have recognized that individualized

questions of injury are different, and can preclude

certification.

E.g.,

Olean

Wholesale

Grocery

Cooperative, Inc. v. Bumble Bee Foods, LLC, 31 F.4th

651, 668–669 (9th Cir. 2022) (en banc), cert denied sub

nom. Starkist Co. v. Olean Wholesale Grocery Coop.

Inc., 143 S. Ct. 424 (2022) (mem.).

Blurring the boundaries between injury and

damages could result in improper class certifications

both in civil RICO class actions and more broadly. This

Court should construe the statute as written and

forestall those deleterious consequences. 3

3 The

decision below expressed concern that excluding

personal injuries from the scope of civil RICO would allow murder

and battery in connection with criminal extortion to escape RICO

liability. See Pet. App. 16a–17a. Extortion and its economic

injuries are subject to RICO. See Pet. Br. 33–35. Intentional torts

like murder and battery are amply remedied under state tort law,

which in such cases generally provides punitive damages that

could easily exceed treble damages. RICO’s “cabin[ed]” remedy

does not, and was not intended to, supplant the sufficient statelaw remedies for intentional torts harming a person rather than

his or her business or property.

25

CONCLUSION

The Second Circuit was dead wrong to characterize

this case as arising from a “defect … inherent in the

statute as written” that only Congress can fix. Pet.

App. 20a. Congress did its job, and allowed plaintiffs

to recover only for injuries to “business or property”—

not for personal injuries and their indirect economic

consequences. The necessary limits are textual and

should be enforced in accord with civil RICO’s

established focus on economic injury. The judgment of

the court of appeals should be reversed.

Respectfully submitted,

DONALD M. FALK

Counsel of Record

SCHAERR | JAFFE LLP

Four Embarcadero Center

Suite 1400

San Francisco, CA 94111

Telephone: (415) 562-4942

dfalk@schaerr-jaffe.com

GENE C. SCHAERR

CRISTINA MARTINEZ SQUIERS

SCHAERR | JAFFE LLP

1717 K Street NW, Suite 900

Washington, DC 20006

Telephone: (202) 787-1060

JONATHAN D. URICK

AUDREY A. BECK

U.S. CHAMBER LITIGATION CENTER

1615 H Street, NW

Washington, DC 20062

Telephone: (202) 463-5337

26

H. SHERMAN JOYCE

LAUREN SHEETS JARRELL

AMERICAN TORT REFORM

ASSOCIATION

1101 Connecticut Ave., N.W.,

Suite 400

Washington, DC 20036

Counsel for Amici Curiae

July 16, 2024