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.; DIXIE HOLDINGS,

LLC, AKA DIXIE ELIXIRS; RED DICE HOLDINGS,

LLC,

Petitioners,

v.

DOUGLAS J. HORN,

Respondent.

On Writ of Certiorari to the United States Court of

Appeals for the Second Circuit

BRIEF OF U.S. HEMP ROUNDTABLE, INC. AS

AMICUS CURIAE SUPPORTING PETITIONERS

James C. Martin*

Counsel of Record

Kim M. Watterson

Cori Smith

REED SMITH LLP

225 Fifth Avenue

Pittsburgh, PA 15222

(412) 288-3131

jcmartin@reedsmith.com

Sarah B. Johansen

Shayna A. Jackson

REED SMITH LLP

101 2nd Street, Suite 1800

San Francisco, CA 94105

(415) 659-8000

Nolan M. Jackson

Jonathan S. Miller

FROST BROWN TODD LLP

20 F Street NW, Suite 850

Washington, D.C. 20001

(202) 292-4165

i

TABLE OF CONTENTS

Page

INTERESTS OF AMICUS CURIAE ....................... 1

SUMMARY OF ARGUMENT.................................. 5

ARGUMENT ............................................................ 6

I.

The Hemp Industry is Multi-Layered

and Creates A Myriad Of Societal

Benefits. ......................................................... 6

II.

The Hemp Industry Will Be Adversely

Impacted By The Costs Associated With

Expanded Tort Liability. ............................. 14

CONCLUSION ....................................................... 23

ii

TABLE OF AUTHORITIES

Page(s)

Cases

Air & Liquid Systems Corp. v. DeVries,

586 U.S. 446 (2019) .................................... 6, 15, 16

Browning-Ferris Indus. v. Kelco

Disposal,

492 U.S. 257 (1989) ..............................................18

Bruesewitz v. Wyeth LLC,

562 U.S. 223 (2011) ..............................................18

City of New York v. Beretta U.S.A.

Corp.,

524 F.3d 384 (2d Cir. 2008) .................................17

Harley-Davidson Motor v. Powersports,

Inc.,

319 F.3d 973 (7th Cir. 2003)................................16

O’Connell v. Shalala,

79 F.3d 170 (1st Cir. 1996) ............................17, 18

Ripley v. Foster Wheeler LLC,

841 F.3d 207 (4th Cir. 2016)................................17

Shalala v. Whitecotton,

514 U.S. 268 (1995) ..............................................18

Standard Fire Ins. Co. v. Ford Motor

Co.,

723 F.3d 690 (6th Cir. 2013)................................16

iii

U.S. Aviation Underwriters Inc. v.

Nabtesco Corp.,

697 F.3d 1092 (9th Cir. 2012)..............................16

Statutes

7 U.S.C. § 5940 ..........................................................10

18 U.S.C. § 1964 ..........................................................1

Other Authorities

Anjori Grover Vasesi, From fields to

fabrics: Hemp leading the charge for

sustainability, Apparel Resources

(Nov. 8, 2023),

https://apparelresources.com/busines

s-news/sustainability/fields-fabricshemp-leading-charge-sustainability/ ............12, 13

Benjamin Rolf, The Ends of Justice

Revised: How to Interpret RICO’s

Procedural Provision, 18 U.S.C.

§ 1965, 80 NOTRE DAME L. REV. 1225

(2005) ....................................................................19

iv

Callan Stein, RICO Report: Supreme

Court to Settle Circuit Split

Regarding RICO Damages Arising

From Personal Injuries, Troutman

Pepper (Apr. 30, 2024),

https://www.troutman.com/a/web/sM

CXdgPe4ZXNq8D1c75K9h/8YSMNB

/transcript_rico_supreme_court_to_s

ettle_circuit_split_regarding_rico_da

mages_arising_from_personal_injuri

es.pdf ..............................................................18, 19

CBD For Seizures—Use, Effectiveness,

Side Effects, and More, Neurology

Center for Epilepsy and Seizures

(Feb. 21, 2024),

https://www.neurocenternj.com/blog/

cbd-for-seizures-use-effectivenessside-effects-and-more/ ..........................................13

Commodities at a glance: Special issue

on industrial hemp, UN Trade &

Development (Nov. 29, 2022),

https://unctad.org/publication/comm

odities-glance-special-issueindustrial-hemp ...................................................14

Eric Helland et al., Consequences of

Products Liability: Evidence from

the Pharmaceutical Market, 36 J. L.

ECON. & ORG., 598 (2020) ................................6, 15

George L. Priest, The Current

Insurance Crisis and Modern Tort

Law, 96 YALE L.J. 1521 (1987) ............................16

v

George L. Priest, The Modern

Expansion of Tort Liability: Its

Sources, Its Effects, and its Reform,

5 J. OF ECON. PERSP. 31 (1991) ............................16

Gerard Lynch, A Conceptual, Practical,

and Political Guide to RICO Reform,

43 VAND. L. REV. 769 (1990) ................................19

Gideon Parchomovsky, et al., Torts and

Innovation, 107 MICH. L. REV. 285

(2008) ..............................................................17, 22

Hemp Processing and Supply China:

From Farm to Market, FloraFlex

(June 15, 2023),

https://floraflex.com/default/blog/pos

t/hemp-processing-and-supplychain-from-farm-to-market ...................................3

Jon Woodhouse, Building a sustainable

future out of locally grown hemp,

Maui News (June 6, 2024)

https://www.mauinews.com/news/loc

al-news/2024/06/building-asustainable-future-out-of-locallygrown-hemp/ ........................................................14

Jonathan Miller, et al., The Evolving

Law and Regulation of Industrial

Hemp in the United States, 8 J.

ANIMAL & ENVTL. L. 12 (2017) .........................9, 10

vi

K.M. Lybecker, et al., Liability risk in

the pharmaceutical industry: Tort

law in the US and UK., The Social

Science Journal (2014)...........................................6

Kenneth Abraham, et al., Rethinking

the Development of Modern Tort

Liability, 101 B.U. L. Rev. 1289

(2021) ....................................................................15

Lea Terry, Key Players in Hawaii's

Legalization of Industrial Hemp

Farming, Newsmax (Dec. 16, 2015),

https://nationalhempassociation.org/

key-players-in-hawaiis-legalizationof-industrial-hemp-farming/)...............................14

Megan Ware, What are the forms of

hemp and what are their health

benefits?, Medical News Today (Jan.

22, 2024),

https://www.medicalnewstoday.com/

articles/308044#forms .....................................3, 13

Muhammad Yasir Naeem, et al., Hemp:

An Alternative Source for Various

Industries and an Emerging Tool for

Functional Food and

Pharmaceutical Sectors, PROCESSES,

12 (2023),

https://www.mdpi.com/22279717/11/3/718/pdf?version=16775713

49 ............................................................................3

vii

Peter H. Schuck, FDA Preemption of

State Tort Law in Drug Regulation:

Finding the Sweet Spot, 13 ROGER

WILLIAMS U. L. REV. 73 (2008).............................20

Reneé Johnson, CONG. RSRCH. SERV.,

IF11860, Production, Marketing,

and Regulation of Hemp Products

(2021). ...............................................................3, 14

Renée Johnson, CONG. RSRCH. SERV.,

R44742, Defining Hemp: A Fact

Sheet (2019) ........................................................7, 8

Renée Johnson, CONG. RSRCH. SERV.,

RL32725, Hemp as an Agricultural

Commodity (2018) .................................... 11, 12, 14

Robin Lash, Industrial Hemp: The Crop

for the Seventh Generation, 27 AM.

INDIAN L. REV. 313 (2003) ......................................2

Steven Garber, Product Liability,

Punitive Damages, Business

Decisions and Economic Outcomes,

1998 WIS. L. REV. 237 (1998) ...............................22

Study Reveals how Cannabidiol

Counters Epileptic Seizures, NYU

Langone Health (Feb. 13, 2023),

https://nyulangone.org/news/studyreveals-how-cannabidiol-countersepilepticseizures#:~:text=Led%20by%20rese

archers%20at%20NYU,by%20diseas

e%20to%20promote%20seizures .....................4, 13

viii

Thomas Duppong, Industrial Hemp:

How the Classification of Industrial

Hemp as Marijuana under the

Controlled Substances Act Has

Caused the Dream of Growing

Industrial Hemp in North Dakota to

Go Up in Smoke, N.D. L. REV. 403

(2009) ......................................................................9

Timothy Patton, Civil RICO: Statutory

and Implied Elements of the Treble

Damage Remedy, 14 TEX. TECH L.

REV. 377 (1983) ....................................................19

Tomas Philipson, Overdosing on

Protection: The Overlapping

Purposes Of The FDA And Product

Liability, Forbes (Dec. 7, 2015),

https://www.forbes.com/sites/tomasp

hilipson/2015/12/07/overdosing-onprotection-the-overlapping-purposesof-the-fda-and-product-liability/ ....................20, 21

U.S. Hemp Roundtable,

https://hempsupporter.com/about/

(last visited July 13, 2024) ....................................1

USDA, Industrial Hemp in the United

States: Status and Market Potential,

ERS.USDA.GOV ......................................................9

Vanessa Rogers, The Future of Hemp in

Kentucky, 4 KY J. EQUINE, AGRI., &

NAT. RESOURCES L. 479 (2012) .............. 2, 7, 12, 14

ix

Victoria Paulus, et al., Cannabidiol in

the context of substance use disorder

treatment: A systematic review, 132

Addictive Behaviors (May 2022),

https://doi.org/10.1016/j.addbeh.2022

.107360 .............................................................4, 13

1

INTERESTS OF AMICUS CURIAE 1

Amicus is U.S. Hemp Roundtable, Inc. (the

Roundtable), the hemp industry’s leading national

advocacy group which is comprised of dozens of member companies and organizations who are united in

bolstering the hemp industry through legislative advocacy, research, and the creation of sustainability

standards. Its mission is “to advocate for sciencedriven, equitable, and inclusive law and regulation for

hemp industries . . . to produce a reliable, sustainable

supply chain of responsible commerce.” 2

This case involves civil actions brought under the

Racketeer Influenced and Corrupt Organizations Act

(RICO). 3 Congress limited the plaintiffs who can

bring a RICO claim to those “injured in [their] business or property by reason of” racketeering activity,

and those plaintiffs may “recover threefold the damages” suffered. 4 Congress did not intend, as well-settled precedent establishes, that personal injuries constitute an injury to “business or property.” The Second

Circuit nonetheless has vastly expanded RICO’s

1 No party or counsel for a party authored any part of this brief,

and no person or entity other than amicus and its counsel made

a monetary contribution intended to fund the preparation or submission of the brief.

2 U.S. Hemp Roundtable, https://hempsupporter.com/about/ (last

visited July 14, 2024).

3 18 U.S.C. § 1964(c).

4 Id.

2

reach by holding that they do. Here, the RICO targets

are industry participants. The threat of expansive liability aimed at those in the industry directly jeopardizes the Roundtable and its mission.

The Roundtable accordingly submits this amicus

brief to illustrate the range of harm expanded RICO

liability would inflict on all players within the industry. Beyond that, consumers would bear the brunt of

the harm in the form of increased costs. And because

of the wide-ranging benefits from hemp products, the

public’s health ultimately will suffer.

Hemp has played a significant role in United

States history. The Founders’ draft declarations of

American independence were written on hemp paper 5

and the plant played a critical role in the manufacture

of materials to support the nation during World War

II. 6 In more recent times, because of its many beneficial properties, hemp has been cultivated for use in a

variety of products such as food, beverages, cosmetics,

nutritional supplements, fabrics and textiles, yarns

and fibers, automotive parts, paper, construction,

building, and insulation materials, and personal care

products. 7 Hemp is also known for its health benefits,

5 Robin Lash, Industrial Hemp: The Crop for the Seventh Gener-

ation, 27 AM. INDIAN L. REV. 313, 315 (2003).

Vanessa Rogers, The Future of Hemp in Kentucky, 4 KY J.

EQUINE, AGRI., & NAT. RESOURCES L. 479, 482 (2012).

6

Reneé Johnson, CONG. RSRCH. SERV., IF11860, Production,

Marketing, and Regulation of Hemp Products (2021).

7

3

as it is a source of healthy fats that help reduce cholesterol, proteins, and magnesium. 8

The hemp industry’s supply chain has several

components: farmers who grow, cultivate, and harvest the crop; processors and manufacturers who convert the raw hemp into finished products; and distributors who provide the products to consumers. 9 Not all

industry players, from beginning to end, are industrial or commercial behemoths. They are mostly small

farmers and businesses who have carved out niches to

diversify their activities and meet a specific public demand. The profit margins at each step, from growing

to distribution, are not large. Every added cost is significant and impactful.

Liability costs cannot readily be absorbed by anyone in the chain, and reduced profits or price increases are the inevitable results. Those costs, in

turn, will fall on those who can least afford them. Less

8 Megan Ware., What are the forms of hemp and what are their

health benefits?, Medical News Today (Jan. 22, 2024),

https://www.medicalnewstoday.com/articles/308044#forms; Muhammad Yasir Naeem, et al., Hemp: An Alternative Source for

Various Industries and an Emerging Tool for Functional Food

12

(2023),

and

Pharmaceutical

Sectors,

Processes,

https://www.mdpi.com/2227-9717/11/3/718/pdf?version=1677571349.

9 Hemp Processing and Supply China: From Farm to Market,

FloraFlex

(June

15,

2023),

https://floraflex.com/default/blog/post/hemp-processing-and-supply-chain-from-farmto-market.

4

money will be available for investment, product development, and research into new and beneficial products. And where costs are passed on to consumers, the

consequences are more than just economic: the increased cost of hemp products may make them unavailable to some who need or have come to rely on

them, thereby impacting public health. Indeed, the ultimate harm here would fall on a growing population

of people appreciating the many benefits of hemp.

That includes people suffering from neurological disorders such as epilepsy who find relief through pharmaceuticals derived from hemp, 10 people suffering

from substance use disorder, 11 people who consume

dietary supplement products for their general health

and wellness, and people looking to food alternatives

made with hemp seeds for their Omega-3 fatty acids,

proteins, and anti-inflammatory, antioxidant properties. What is more, other industries are looking to

hemp to make hemp-based plastics, fiberglass, and

other products, which, in turn, vastly reduces the environmental impact of other traditional products.

10 See, e.g., Study Reveals how Cannabidiol Counters Epileptic

Seizures, NYU Langone Health (Feb. 13, 2023), https://nyulangone.org/news/study-reveals-how-cannabidiol-counters-epileptic-seizures (discussing studies describing how CBD reduces seizures in treatment-resistant forms of pediatric epilepsy).

11 See, e.g., Victoria Paulus, et al., Cannabidiol in the context of

substance use disorder treatment: A systematic review, 132 Addictive

Behaviors

(May

2022),

https://doi.org/10.1016/j.addbeh.2022.107360.

5

It is amicus the Roundtable’s position that this

Court should avoid the adverse impacts of expanded

tort liability on the hemp industry and the public

health by containing RICO within its settled and historic bounds.

SUMMARY OF ARGUMENT

Despite its historical significance and popularity,

it was not until 2018 that the growth and cultivation

of hemp became fully legal within the United States.

As noted, hemp is used to produce countless products,

including nutritional supplements, fabrics, textiles,

paper, construction materials, automotive materials,

food, and personal care products, thereby enhancing

public health and offering environmentally friendly

alternatives to many products. And, as also noted, the

industry is reliant upon the supply chain, which

starts with farmers and ends with consumers of many

products with wide ranging uses.

It is well documented that expansive tort liability

increases costs for businesses and consumers. Increased risk of tort liability forces businesses to reallocate resources to compliance and loss and away from

product development, research, and innovation. This

is especially so in the healthcare and pharmaceutical

industries, where increased costs of tort liability impacts consumers by passing those costs on to them

6

and reducing product availability. 12

RICO liability fits this paradigm, particularly because it can be such an attractive tool given its favorable (to plaintiffs) damages and venue provisions. If

personal injury liability is made part of the statute’s

regime, the cost of doing business (in an industry that

is already facing evolving and varying regulation)

would rise. That result is undesirable and should be

avoided by keeping exposure to liability under RICO

within the boundaries intended by Congress.

ARGUMENT

I.

The Hemp Industry is Multi-Layered and

Creates A Myriad Of Societal Benefits.

“Botanically, hemp and marijuana are from the

same species of plant, Cannabis sativa, but from different varieties or cultivars.” 13 Hemp and marijuana

“are distinguished by their use and chemical composition as well as differing cultivation practices in their

12 See, e.g., Air & Liquid Systems Corp. v. DeVries, 586 U.S. 446,

463-464 (2019) (Gorsuch, J., Thomas, J., & Alito, J., dissenting);

Eric Helland et al., Consequences of Products Liability: Evidence

from the Pharmaceutical Market, 36 J. L. ECON. & ORG., 598, 599

(2020); K.M. Lybecker, et al., Liability risk in the pharmaceutical

industry: Tort law in the US and UK., The Social Science Journal, 13 (2014).

13 Renée Johnson, CONG. RSRCH. SERV., R44742, Defining Hemp:

A Fact Sheet, at 1 fn.1 (2019).

7

production.” 14 Marijuana refers to a cultivated plant

used as a psychotropic drug, whereas hemp is cultivated for use in a variety of consumer products. 15

By contrast, “[t]he term industrial hemp . . . refers

to cannabis varieties that are grown primarily as an

agricultural crop, such as seeds and fiber, and byproducts, such as oil, seed cake, and hurds.” 16 Hemp is

characterized as being low in tetrahydrocannabinol

(THC), the psychotropic compound, with higher levels

of cannabidiol (CBD), a non-psychotropic compound

with many therapeutic properties. 17

The hemp industry itself is not new: globally, it

has existed and thrived for centuries. “[Hemp] is believed to have been the world’s most cultivated crop

and primary industry for 3,000 years.” 18 Beginning in

approximately the 1600s, farmers grew hemp to supply the British navy with sails and rope. 19 By the

1700s, some states began to encourage hemp production. 20 In the 1800s, the economic potential of the

14 Id.

15 Id.

16 Id. at 5.

17 Id.

18 Rogers, supra note 6 at 481.

19 Id.

20 Id.

8

hemp industry became clear with several states, including Kentucky, Illinois, Nebraska, Michigan, Minnesota, Iowa, Arkansas, California, and Wisconsin,

leading the way. 21 During World War II, the United

States turned to hemp to manufacture its war supplies, resulting in the cultivation of over 400,00 acres

of hemp. 22

Despite this storied history, hemp cultivation,

once “one of the world’s largest industries,” came to

an abrupt halt when hemp was classified as marijuana. 23 The Marihuana Tax Act of 1937 increased costs

within the supply chain and the simultaneous fight

against drugs led to the misconception that the hemp

industry was a “dope conspiracy.” 24 The Marihuana

Tax Act “placed all Cannabis culture under the regulatory control of the U.S. Treasury Department . . .

[and] required the registration and licensing of all

hemp growers with the Federal Government in an effort to restrict production of marijuana in the United

States.” 25 Although the Marijuana Tax Act excluded

21 Id.

22 Id. at 482.

23 Id.

24 Id. at 484.

25 Jonathan Miller, et al., The Evolving Law and Regulation of

Industrial Hemp in the United States, 8 J. ANIMAL & ENVTL. L.

12, 15 (2017) (quoting USDA, Industrial Hemp in the United

States: Status and Market Potential, ERS.USDA.GOV, at 3) (internal quotation marks omitted).

9

hemp from the definition of marijuana, when Congress repealed it in favor of the Controlled Substances

Act (CSA), it “distinguished the non-psychoactive

parts of the cannabis plant from the definition of marijuana.” 26 As a result, it has always been legal to import non-psychoactive cannabis products, as petitioners did here.

Nevertheless, the domestic “growth and cultivation of industrial hemp” remained illegal under the

CSA. 27 The CSA’s broad definition of marijuana

largely “placed the entire use of the hemp plant,

whether for drug use or as industrial hemp, squarely

within the control of the CSA.” 28

On February 7, 2014, the Agriculture Act of 2014

(“2014 Farm Bill”), provided a small breakthrough. It

legalized domestic growth and cultivation of industrial hemp. 29 Pursuant to the relevant sections, “state

departments of agriculture and institutions of higher

education are authorized to grow and cultivate indus-

26 Id. at 16.

27 Id. at 17.

28 Thomas Duppong, Industrial Hemp: How the Classification of

Industrial Hemp as Marijuana under the Controlled Substances

Act Has Caused the Dream of Growing Industrial Hemp in North

Dakota to Go Up in Smoke, N.D. L. REV. 403, 418 (2009).

29 7 U.S.C. § 5940, Pub. L. 113-79, 128 Stat. 649.

10

trial hemp for research conducted under an agricultural pilot program.” 30 The 2014 Farm Bill “makes

clear that Congress’ current intent [was] to define industrial hemp as all parts of the plant, as long as the

THC level is less than 0.3%.” 31

Four years later, in December 20, 2018, the Agriculture Improvement Act of 2018 (“2018 Farm Bill”),

produced an even more significant breakthrough. 32

This law removed hemp from the CSA’s definition of

marijuana, thereby permitting “the cultivation, processing, marketing, and sale of hemp and any cannabinoid derived from hemp that is produced by an authorized grower in accordance with the 2018 Farm

Bill, associated federal USDA regulations, and applicable state regulations.” 33 This, among other changes,

“returned U.S. hemp production to the status of an

agricultural commodity and thus eligible for USDAsupported farm programs, similar to the status it had

in the United States before the late 1950s.” 34

30 Miller, et al., supra note 25 at 18 (citing 7 U.S.C. § 5940(a)(1)-

(2)).

31 Id. at 20.

32 P.L. 115-334, Section 12619.

33 Johnson, supra note 13 at 4.

34 Id. at 5. Still, the FDA has oversight of hemp-derived con-

sumer products as a food ingredient, as well as hemp included

as an ingredient in body products, dietary supplements, cosmetics, and other therapeutic products. See Johnson, supra note 7 at

3.

11

***

The hemp industry begins with farmers who grow

and cultivate the crop for processing. Manufacturers

then take the processed hemp materials and formulate them into various products: the fiber is spun into

yarn or textiles; seeds and oil are used in food and

drink products; CBD extracts can be used in oils, topical ointments, or other pharmaceuticals. The products then can be distributed to wholesalers, retailers,

and directly to consumers.

The beneficial uses of these hemp products are

endless. “The global market for hemp consists of more

than 25,000 products in nine submarkets: agriculture, textiles, recycling, automotive, furniture, food

and beverages, paper, construction materials, and

personal care.” 35 Different parts of the plant are used

to manufacture “fabrics and textiles, yarns and spun

fibers, paper, carpeting, home furnishings, construction and insulation materials, auto parts, and composites . . . animal bedding, material inputs, papermaking, and oil absorbents.” 36 Fabrics and textiles made

with hemp are valued because of its “exceptional

strength, durability, antimicrobial and UV-resistant

properties, natural resistance of mold, mildew and rot

35 Renée Johnson, CONG. RSRCH. SERV., RL32725, Hemp as an

Agricultural Commodity, at 2 (2018).

36 Id.

12

and its ability to readily accept dyes.” 37 And “[o]il from

the crushed hemp seed is used in soap, shampoo, lotions, bath gels, and cosmetics. . . . [as well as] nutritional supplements and in medicinal and therapeutic

products, including pharmaceuticals.” 38

Hemp also can be used as a building material,

“lightweight insulation material and in hemp plastics

and related composites for use as fiberglass alternative by the automotive and aviation sectors. . . . [it] is

also promoted as a potential biodiesel feedstock.” 39

“[O]il from hemp seeds can [also] be used as a substitute for petroleum and other fossil fuels as an energy

source.” 40

The health benefits of hemp-derived neutraceuticals are becoming more well-known. Hemp seeds are

nutrient dense and can be incorporated into food, including using hemp seeds and oils to make milk substitutes, cheese substitutes, and protein powder. 41

Hemp also contains healthy fats, including Omega-3

fatty acids, that help reduce cholesterol, and is rich in

37 Anjori Grover Vasesi, From fields to fabrics: Hemp leading the

charge for sustainability, Apparel Resources (Nov. 8, 2023),

https://apparelresources.com/business-news/sustainability/fields-fabrics-hemp-leading-charge-sustainability/.

38 Johnson, supra note 35 at 2.

39 Id.

40 Rogers, supra note 6 at 495.

41 Ware, et al., supra note 8.

13

proteins and magnesium. 42 CBD-derived pharmaceuticals also have been known to treat neurological disorders such as epilepsy and aid in the treatment of

substance use disorder. 43 Research continues, but

studies show a reduction in seizures for epilepsy patients taking CBD-derived pharmaceutical drugs and

a reduction in drug-seeking behavior in those suffering from substance use disorder. 44

There are agricultural and environmental advantages as well. Hemp’s chemical compounds can be

extracted from the entire plant, reducing waste 45 and

boosting yields of other crops, when used in crop rotation crop. 46 Hemp also “can be planted on land not

suitable for other crops and helps to replenish the soil

by removing heavy metals and other contaminants.” 47

42 Id.

43 See, e.g., Study Reveals how Cannabidiol Counters Epileptic

Seizures, supra note 10 (discussing studies describing how CBD

reduces seizures in treatment-resistant forms of pediatric epilepsy); Paulus, et al., supra note 11.

44 See, e.g., CBD For Seizures—Use, Effectiveness, Side Effects,

and More, Neurology Center for Epilepsy and Seizures (Feb. 21,

2024), https://www.neurocenternj.com/blog/cbd-for-seizures-useeffectiveness-side-effects-and-more/; Paulus, et al., supra note

11.

45 Commodities at a glance: Special issue on industrial hemp, UN

Trade & Development (Nov. 29, 2022), https://unctad.org/publication/commodities-glance-special-issue-industrial-hemp.

46 Id.

47 Id.

14

Hemp therefore is an environmentally friendly alternative to many other traditional materials because no

part of the plant is wasted and it requires minimal

pesticides for growth. 48

Studies show that hemp “has such a diversity of

possible uses, [and] is being promoted by extremely

enthusiastic market developers.” 49 Studies also show

that there are “production advantages associated

with hemp” and “acknowledge hemp’s benefits as a rotational crop” because it is “less environmentally degrading than other agricultural crops.” 50

II.

The Hemp Industry Will Be Adversely Impacted By The Costs Associated With Expanded Tort Liability.

The impact and adverse consequences associated

with expansive tort liability are well-documented.

48 Rogers, supra note 6 at 495; Johnson, supra note 7 at 1-2; see

also Lea Terry, Key Players in Hawaii’s Legalization of Industrial Hemp Farming, Newsmax (Dec. 16, 2015), https://nationalhempassociation.org/key-players-in-hawaiis-legalizationof-industrial-hemp-farming/ (discussing Hawaii’s prioritization

of the cultivation of hemp to boost the economy); Jon Woodhouse,

Building a sustainable future out of locally grown hemp, Maui

News (June 6, 2024) https://www.mauinews.com/news/localnews/2024/06/building-a-sustainable-future-out-of-locallygrown-hemp/ (discussing increasing number of homes built with

hemp in a move toward more eco-friendly construction materials).

49 Johnson, supra note 35 at 6.

50 Id.

15

“[T]he percentage increases in tort payouts in real dollars during the twenty-one-year period between 1950

and 1971 and the forty-seven-year period between

1970 and 2017 were . . . generally several hundred

percent.” 51 Expanded tort liability “force[s] many

manufacturers of safe products to spend time and

money educating themselves and writing warnings

about the dangers of other people’s more dangerous

products.” Air & Liquid Systems Corp. v. DeVries,

586 U.S. 446, 463-464 (2019) (Gorsuch, J., Thomas, J.,

& Alito, J., dissenting).

“All this would, as well, threaten to leave consumers worse off.” Id. 464. 52 Industries are forced to “pass

[on] to the consuming public the costs of tort damages

in the prices of [] products.” Harley-Davidson Motor v.

51 Kenneth Abraham, et al., Rethinking the Development of Mod-

ern Tort Liability, 101 B.U. L. Rev. 1289, 1310-11 (2021); see also

Helland et al., supra note 12 at 599 (“Payments in products liability suits even excluding legal fees and other indirect costs account for 1.74% of GDP. In health care . . . suits against drug

companies amount to 2.26% of all drug expenditures.”).

52 See also George L. Priest, The Modern Expansion of Tort Lia-

bility: Its Sources, Its Effects, and its Reform, 5 J. OF ECON.

PERSP. 31, 44 (1991) (“The [general aviation] industry has

claimed that the impact of [] liability costs have led to the decline

in U.S. production from 17,048 planes in 1979 to 1,143 planes in

1988.”); George L. Priest, The Current Insurance Crisis and Modern Tort Law, 96 YALE L.J. 1521, 1525 (1987) (“[C]ontinued expansion of tort liability on insurance grounds leads to a reduction in total insurance coverage available to the society . . . parties most drastically affected by expanded liability and by the

current insurance crisis are the low-income and poor, exactly the

parties that courts had hoped most to aid.”).

16

Powersports, Inc., 319 F.3d 973, 987 (7th Cir. 2003).

With necessary products often becoming cost-prohibitive, legislatures are forced to step in “to limit costs of

[tort] insurance and thereby lessen the costs of products to consumers.” Standard Fire Ins. Co. v. Ford

Motor Co., 723 F.3d 690, 698 (6th Cir. 2013) (explaining the “clear” purpose of a Tennessee tort reform act

limiting product liability recovery to limit costs of insurance and prices of products). Legislatures often enact tort reform legislation due to the “fear that manufacturers [are] being driven to the wall because . . . of

the long tail of [tort] liability.” U.S. Aviation Underwriters Inc. v. Nabtesco Corp., 697 F.3d 1092, 1097

(9th Cir. 2012) (citations omitted) (discussing Congress’s purpose in enacting tort reform limiting liability for airplane manufacturers); see also City of New

York v. Beretta U.S.A. Corp., 524 F.3d 384, 395

(2d Cir. 2008) (upholding federal tort reform law in

the firearms industry because “Congress rationally

perceived a substantial effect on the industry of the

[tort] litigation”).

Of particular relevance here given the health benefits of hemp-based products, expanded tort liability

threatens to make healthcare products prohibitively

expensive for those who need them most. “[T]he long

shadow of tort liability cast by [expanded tort liability

for health care products] would drive up prices and

eventually force [] suppliers out of the market.”

O’Connell v. Shalala, 79 F.3d 170, 172-73 (1st Cir.

1996) (citations omitted). Where healthcare products

17

are still being developed and tested, “as a practical

matter, a higher risk of [tort] liability . . . would increase costs . . . while decreasing the supply of contractors and research and development.” Ripley v.

Foster Wheeler LLC, 841 F.3d 207, 210 (4th Cir. 2016)

(citations omitted). 53 Worse still, some manufactures

may opt to “avoid uncertain liability” rather than introduce new products into the market. See, e.g.,

Browning-Ferris Indus. v. Kelco Disposal, 492 U.S.

257, 282 (1989) (O’Connor, J., dissenting in part). 54

The adverse consequences of tort expansion apply

with equal force here. To be sure, RICO “has been

taken from this anti-mafia, anti-organized crime statute, and now applies to ordinary run of the mill business disputes,” including those concerning personal

53 See also, Gideon Parchomovsky, et al., Torts and Innovation,

107 MICH. L. REV. 285, 289 (2008) (“[T]he increased [tort] liability innovators face raises the total cost of producing innovations

and, consequently, the price consumers must pay for new technologies and products that do reach the market.”).

54 See also O’Connell, 79 F.3d at 172-73 (discussing federal tort

reform for vaccine-related personal injury lawsuits); Bruesewitz

v. Wyeth LLC, 562 U.S. 223, 227–28 (2011) (“Whereas between

1978 and 1981 only nine products-liability suits were filed

against DTP manufacturers, by the mid-1980’s the suits numbered more than 200 each year. This destabilized the DTP vaccine market, causing two of the three domestic manufacturers to

withdraw . . . To stabilize the vaccine market and facilitate compensation, Congress enacted the NCVIA in 1986.”); Shalala v.

Whitecotton, 514 U.S. 268, 269 (1995) (discussing the statutory

scheme of the National Childhood Vaccine Injury Act of 1968 for

addressing and preventing injuries from vaccines as a better solution for vaccine injuries than tort liability).

18

injury claims. 55 But Congress never intended for

RICO to be applied in these circumstances. In expressly authorizing suits for injuries to “business or

property,” Congress implicitly excluded authorization

of suits alleging other types of injuries, including personal injuries.

To ignore this distinction would “render[] meaningless or mostly meaningless RICO’s very clear business or property restriction,” and cause RICO to “explode[] into a supercharged state tort statute.” 56 And

it is not hyperbolic to say that; it is a litigation fact.

Known as “possibly the most potent and flexible

weapon in commercial litigation today[,]” 57 plaintiffs’

attorneys have commented that “it is virtually malpractice not to add a RICO cause of action to [a] complaint” if there is “a legitimate claim that can be cast

in RICO terms” because of the treble damages and attorney’s fees available. 58 And RICO’s expansive venue

55 Callan Stein, RICO Report: Supreme Court to Settle Circuit

Split Regarding RICO Damages Arising From Personal Injuries,

Troutman Pepper (Apr. 30, 2024), at 4, https://www.troutman.com/a/web/sMCXdgPe4ZXNq8D1c75K9h/8YSMNB/transcr

ipt_rico_supreme_court_to_settle_circuit_split_regarding_rico_damages_arising_from_personal_injuries.pdf.

56 Id.

57 Timothy Patton, Civil RICO: Statutory and Implied Elements

of the Treble Damage Remedy, 14 TEX. TECH L. REV. 377, 379

(1983).

58 Gerard Lynch, A Conceptual, Practical, and Political Guide to

RICO Reform, 43 VAND. L. REV. 769, 794 (1990).

19

provision permits a court to exercise jurisdiction over

“any other RICO defendant if the charges against the

additional defendants are connected to the case

against the first defendant and the case against the

first defendant cannot be fully adjudicated without

the presence of the additional defendants.” 59 All of

this makes the RICO statute a very attractive tool.

Expanding the RICO regime to encompass liability for

personal injuries would legitimize the statute’s use as

a litigation “weapon” in a context not intended by

Congress.

And because product safety, including when it

comes to ingestible and topical products, is already

highly regulated, expanded RICO liability will not

lead to any added benefit. The FDA strictly regulates

food, drugs, and cosmetics and “sets optimal safety

standards . . . [that] best balance between safety, effectiveness, cost, and other relevant factors, taking

into account that some . . . may be harmed even under

such a standard.” 60 The tort law system governing

59 Benjamin Rolf, The Ends of Justice Revised: How to Interpret

RICO’s Procedural Provision, 18 U.S.C. § 1965, 80 NOTRE DAME

L. REV. 1225, 1228 (2005).

60 Peter H. Schuck, FDA Preemption of State Tort Law in Drug

Regulation: Finding the Sweet Spot, 13 ROGER WILLIAMS U. L.

REV. 73, 77-78 (2008).

20

products co-exists with this FDA oversight, and together they provide a “dual safety system.” 61 Still,

commentators looking at these two safeguards have

cautioned that “if one system is set up to work well,

adding another can be harmful to the health and

pocket book of patients.” 62 That is because overlapping and sometimes competing regulatory and liability regimes “just raise[ ] costs to [manufacturers] and

thus increases product delays and prices faced by patients.” 63 The Roundtable does not resist the application of existing regulatory frameworks and traditional product liability law to hemp products. Instead,

the point here is that adding RICO as yet another regime—where the industry already is highly regulated

and the subject of tort law—will only serve to exacerbate potential adverse consequences.

These risks of expanded tort liability for personal

injuries are real for the hemp industry. The likely targets of such RICO liability would be product distributors. Faced with this reality, distributors would be

forced to add extra layers of insurance (if insurance

61 Tomas Philipson, Overdosing on Protection: The Overlapping

Purposes Of The FDA And Product Liability, Forbes (Dec. 7,

2015),

https://www.forbes.com/sites/tomasphilipson/2015/12/07/overdosing-on-protection-the-overlapping-purposes-of-the-fda-and-product-liability/; Schuck, supra note 60 at

78.

62 Philipson, supra note 61.

63 Id.

21

covering RICO claims is even available), with accompanying increase in costs. Lawyers would need to be

retained to defend lawsuits. Extraordinary verdicts

might not be covered by insurance (even if insurance

is available) and would have to be paid by the defendant itself. And, if tort lawsuits become more prevalent, insurance costs will at least rise, if insurance is

even available at all.

But there is little likelihood that product distributors would be the only targets. Looking for more enhanced recoveries, enterprising lawyers would join

growers, processors, and manufacturer businesses

with equally small, if not smaller, profit margins and

who likewise cannot readily absorb the costs. The cycle of increased costs for them, whether through insurance, defense, or verdicts, would be the same. The

entire industry would be dealt a crippling blow.

And where would the targets turn to spread or account for the costs? Price increases would be one avenue, passed on through each link in a product’s life

cycle. Reducing investment in new product development would be another. Reduction in potential salary

increases or employee benefits would be another place

to go. None of these impacts are desirable.

One other thing is certain. The ultimate harm that

follows from increased liability costs falls on those

who buy the products. To account for these increased

costs to those in the supply chain, prices to consumers

22

must go up and here those increases would ripple

through sectors of the economy, like healthcare,

where consumers need the beneficial products but

may not be able to afford them. These consumers will

be forced to make hard choices, including going without the life-enhancing products the hemp industry

produces.

And there will be other collateral consequences as

well. As noted, there are benefits that flow from a vigorous hemp industry for agriculture, the environment, and other economic sectors. Yet, the reduced investment and increased costs that enhanced liability

exposure engenders will threaten all of this, too.

In sum, with the increased burden of expanded

tort liability, all hemp industry participants will be

faced with perverse incentives that may curtail innovation. 64 The benefits of the hemp industry cannot be

overstated, and concomitantly, nor can the potential

harms that would inevitably result from expanded

RICO liability in personal injury litigation. For this

64 Parchomovsky, et al., supra note 53 at 289 (“The heightened

risk of liability for tort damages induces innovators to limit their

[research and development] endeavors to the conventional technological frameworks. Instead of focusing upon genuine technological breakthroughs, innovators will strive to produce incremental improvements on customary and conventional technologies.”); Steven Garber, Product Liability, Punitive Damages,

Business Decisions and Economic Outcomes, 1998 WIS. L. REV.

237, 269 (1998).

23

reason, RICO should be limited to circumstances expressly intended by Congress—injury to business or

property.

CONCLUSION

Congress spoke clearly regarding its intent for

RICO liability. Amicus the Roundtable supports Petitioners’ position that RICO should be restricted to its

intended boundaries and not expanded to personal injury lawsuits.

Respectfully submitted,

James C. Martin*

Counsel of Record

Kim M. Watterson

Cori Smith

REED SMITH LLP

225 Fifth Avenue

Pittsburgh, PA 15222

(412) 288-3131

jcmartin@reedsmith.com

Sarah B. Johansen

Shayna A. Jackson

REED SMITH LLP

101 2nd Street, Suite 1800

San Francisco, CA 94105

(415) 659-8000

Nolan M. Jackson

Jonathan S. Miller

FROST BROWN TODD LLP

20 F Street NW, Suite 850

Washington, D.C. 20001

(202) 292-4165