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US Supreme Court rejects medical marijuana firm's bid to avoid racketeering suit
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US Supreme Court rejects medical marijuana firm's bid to avoid racketeering suit
Apr 2, 2025 7:24 AM

WASHINGTON, April 2 (Reuters) - The U.S. Supreme Court

ruled on Wednesday against Medical Marijuana Inc ( MJNA ) in

its bid to fend off a lawsuit by a commercial truck driver who

was fired for failing a drug test after taking cannabidiol, or

CBD, that he said was falsely sold as lacking the psychoactive

ingredient present in marijuana.

The justices, in a 5-4 decision, upheld a lower court's

ruling that had allowed plaintiff Douglas Horn to bring a civil

lawsuit against the San Diego-based company under the Racketeer

Influenced and Corrupt Organizations Act. This 1970 federal law,

known as RICO, was designed to crack down on organized crime and

its economic impact.

The RICO law's civil provisions permit triple damages for

successful lawsuits by "any person injured in his business or

property" as a result of certain actions by a defendant. At

issue in the case was whether Horn's loss of employment was the

kind of business injury Congress meant to guard against when it

enacted the law.

Horn, who was ailing from injuries sustained in a trucking

accident, in 2012 purchased a CBD tincture called Dixie X. It

was advertised as a natural pain reliever containing no

tetrahydrocannabinol (THC), the psychoactive ingredient in

marijuana that causes a high.

After a random drug test ordered by his employer detected

THC in his system, Horn was fired from his trucking job that he

had held for more than a decade. Horn has said he is not a

marijuana user.

Horn and his wife, Cindy, in 2015 brought a lawsuit in

federal court in New York state seeking monetary damages,

claiming, among other things, that Medical Marijuana ( MJNA ) and

associated companies violated the RICO Act's provisions. Horn

had the tincture independently tested in a laboratory, which

confirmed that the product contained THC.

According to the suit, a "pattern of racketeering activity"

by the companies - including violations of the federal

Controlled Substances Act, as well as mail fraud and wire fraud

- inflicted a business or property injury on Horn in the form of

his firing.

A federal trial judge ruled against Horn's civil RICO claim.

The New York-based 2nd U.S. Circuit Court of Appeals reversed

the judge's decision, prompting Medical Marijuana's ( MJNA ) appeal to

the Supreme Court.

The Supreme Court heard arguments in the case on Oct. 15.

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