From Capone to Corporations: Supreme Court Ruling on Civil RICO Claims Could Create Uptick in Personal Injury Lawsuits

On April 2, 2025, the U.S. Supreme Court extended the reach of Section 1964(c) of the Racketeer Influenced and Corrupt Organizations (RICO) Act by holding that a plaintiff may seek treble damages for a business or property loss resulting from a personal injury.^[1] The 5-4 decision has resolved a 3-2 circuit split over whether the RICO statute precludes relief for losses stemming from a personal injury.

Civil Actions Under RICO

Passed by Congress in 1970, RICO is a federal law that prohibits a person from investing, acquiring, or participating in an enterprise through a pattern of racketeering activity involving certain “predicate acts”, such as murder, kidnapping, gambling, arson, robbery, bribery, extortion, and drug dealing.^[2] The law provides a private treble damage right of action to “[a]ny person injured in his business or property by reason of a violation of [RICO]”.^[3]

RICO was originally intended to combat organized crime. However, as Justice Powell noted in his dissent in Sedima, S.P.R.L. v. Imrex Co.^[4], “[o]nly a small fraction of the scores of civil RICO cases now being brought implicate organized crime in any way.” Because some of the potential predicate acts under RICO involve infliction of personal injuries, plaintiffs have attempted to bring civil RICO claims for economic losses (i.e., business or property losses) arising from personal injuries. The Supreme Court’s recent opinion addresses whether RICO should serve as an available remedy for plaintiffs who have suffered an economic loss stemming from a personal injury.

Case Background

This case deals with a RICO claim brought by a commercial truck driver against an alternative medicine manufacturer. Seeking relief from chronic pain, Plaintiff Douglas Horn purchased and began taking “Dixie X”, a purportedly THC-free CBD tincture made by defendant Medical Marijuana, Inc. Several weeks later, after being selected by his employer for a random drug screening, Horn tested positive for THC. Because he later refused to participate in a substance abuse program, his employer fired him. Horn sued Medical Marijuana in the District Court of the Western District of New York, raising a civil RICO claim. The district court granted summary judgment to Medical Marijuana on the claim, reasoning that Horn could not recover under RICO for a business or property harm resulting from a personal injury (i.e., the introduction of THC into Horn’s system through the ingestion of Dixie X).^[5] On appeal, the Second Circuit reversed, holding that Section 1964(c) does not exclude claims for economic loss resulting from personal injury.^[6] The Second Circuit maintained that “business and property are no less injured” when that economic injury flows from a personal injury.

Supreme Court Holding

In a majority opinion written by Justice Coney Barrett, the Supreme Court affirmed the Second Circuit’s decision, siding also with the Ninth Circuit and rejecting the contrary view maintained by the Sixth, Seventh, and Eleventh Circuits. The Supreme Court held that Section 1964(c) does not bar recovery for business or property harms that derive from a personal injury. The Court made clear that the RICO statute “does not allow recovery for all harms”; it only allows recovery for harms to business and property. However, the statute permits a plaintiff to seek relief for a business or property loss “regardless of whether the loss resulted from a personal injury.” In the opinion, Justice Coney Barrett provided the following example: a gas station owner beaten in a robbery cannot recover under RICO for his pain and suffering, but he can recover for business losses if his injuries force him to shut his doors.

How this Ruling Affects the RICO Litigation Landscape

The Court’s slim majority rejected what it deemed to be Medical Marijuana’s “engineer[ed]…rule” that “Civil RICO should permit suit against Tony Soprano, but not against an ordinary tort-feasor.” Justice Kavanaugh dissented, expressing concern that this ruling would “eviscerate the careful balance that Congress struck when enacting RICO” and that “RICO would suddenly authorize a vast new category of personal-injury suits seeking treble damages in federal court.” The majority, however, had little sympathy for these potential consequences: “If the breadth of the statute ‘leads to the undue proliferation of RICO suits, the correction must lie with Congress.’” Time will tell whether the fears of the vigorous dissents will prove true. But companies can expect an uptick in personal injury lawsuits from enterprising plaintiff attorneys tacking on RICO claims to obtain treble damages and increase leverage for settlement.

How Companies Can Respond to this Potential Expansion of Liability

Companies faced with efforts to turn garden-variety tort litigation into civil RICO claims should focus their defense on what the Court did not decide. While the Supreme Court expanded the scope of civil RICO claims, it did so on limited grounds, refusing to decide whether the specific circumstances in this case would meet the many other requirements of a RICO claim. The Supreme Court emphasized that plaintiffs may not be able to easily transform their personal injury claims into RICO suits for treble damages for several reasons. First, RICO imposes a “direct-relationship requirement” between the asserted injury and the alleged conduct. An attenuated theory of causation is not enough. Second, RICO requires establishing a pattern of racketeering activity, “[s]o harm resulting from a single tort is not a ticket to federal court for treble damages.” Finally, not every monetary harm will necessarily implicate RICO. Companies can still use the statutory text to exclude certain types of alleged economic injuries.