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Supreme Court Allows RICO Lawsuit Over Misleading CBD Claims

In a 5-4 decision, the Court ruled that a truck driver can sue for financial harm caused by a mislabeled CBD product, setting a precedent for RICO's application in consumer cases.

FILE - The Supreme Court at sunset in Washington, Feb. 13, 2016. (AP Photo/Jon Elswick, File)
A view of the U.S. Supreme Court in Washington, U.S. June 29, 2024. REUTERS/Kevin Mohatt/File Photo
Scaffolding on the US Supreme Court in Washington, DC, on Saturday, March 22.
FILE - The Supreme Court in Washington, June 30, 2024. (AP Photo/Susan Walsh, File)

Overview

  • Douglas Horn, a truck driver, claims he was fired after using a CBD product falsely advertised as THC-free, which led to a failed drug test.
  • The Supreme Court ruled that financial harm to earning potential qualifies as a business injury under RICO, allowing Horn to seek triple damages.
  • Justice Amy Coney Barrett authored the majority opinion, rejecting the company's argument that RICO does not cover such claims.
  • Dissenting justices and the U.S. Chamber of Commerce warned the decision could increase lawsuits against businesses, expanding RICO's scope.
  • The ruling does not resolve whether the product contained THC, leaving Horn's underlying claims to be determined in lower courts.