The U.S. Supreme Court docket has agreed to listen to a case with probably vital monetary repercussions for the CBD trade. The case facilities round a truck driver who claims he was fired after failing a drug check as a consequence of THC current in a CBD product he used, regardless of its marketed lack of the psychoactive compound.
The motive force, Douglas Horn, sued the product’s producers, Medical Marijuana Inc., Dixie Holdings LLC, and Pink Cube Holdings LLC, below the Racketeer Influenced and Corrupt Organizations Act (RICO). Initially designed to fight organized crime, RICO permits for civil lawsuits towards alleged fraudulent schemes, with the potential for triple damages if profitable.
The businesses are associated below Medical Marijuana Inc., based mostly in Vista, California.
A THC shock
Horn stated he took the product to assist with power shoulder and again ache after struggling a critical accident. The makers stated it contained CBD however no THC, based on court docket paperwork.
With many employers sustaining zero-tolerance insurance policies for THC, even hint quantities present in authorized hemp-derived CBD merchandise might result in comparable authorized battles and potential monetary spoil for corporations concerned.
Horn initially filed a private damage declare filed in 2015. It failed in U.S. District court docket however was revived by the Second Circuit Court docket of Appeals, which dominated that his declare might proceed below RICO.
Authorized divide
The choice highlights a authorized divide amongst federal circuit courts on whether or not private damage claims fall below RICO, and raises the query of whether or not RICO claims can be utilized for private authorized damage that leads to misplaced wages and advantages.
The Ninth Circuit Court docket of Appeals shares the Second Circuit’s place, whereas the Sixth, Seventh, and Eleventh circuits disagree, arguing RICO doesn’t cowl such financial harms.
“Solely this court docket can resolve that break up, and this case is the best car for doing so,” the defendant corporations stated of their petition to the Supreme Court docket said.
