Clarifying the Role of Personal Injury in RICO Claims
Medical billings can lead to government fraud claims based on qui tam actions for incorrect billings.
Medical Marijuana, Inc. v. Horn does not radically expand RICO
Headline / Lead
In Medical Marijuana, Inc. v. Horn, the U.S. Supreme Court addressed whether a plaintiff who suffered personal injuries can recover treble damages under the civil RICO (Racketeer Influenced and Corrupt Organizations) statute. The Court’s decision clears some uncertainty — and may influence how plaintiffs structure claims when both injury and business or property loss are alleged. Wikipedia
Background & Issue
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The respondent (“Horn”) suffered personal injuries and then attempted to bring a RICO claim alleging that the defendant’s illegal acts caused business or property losses tied to those injuries.
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Lower courts had split: some circuits barred RICO claims derived from personal injuries (i.e. saying RICO redresses only “business or property” harm, not bodily harm), while others allowed them. Wikipedia
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The Supreme Court granted certiorari, in part to address that split. Wikipedia
Holding & Reasoning
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The Court held, on narrow grounds, that RICO may permit recovery of treble damages when a plaintiff claims business or property losses “by reason of” personal injury — but carefully limited its reasoning, declining to resolve broader questions about the relationship between personal injury and property or business harm. Wikipedia
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The majority opinion (Justice Barrett) did not fully adopt a sweeping rule, but left open certain tensions and potential circuit splits. Wikipedia
Implications for Personal Injury Litigators
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New strategic pathways
Plaintiffs with overlapping personal injury and economic consequences (lost wages, increased expenses, diminished earning capacity) may consider RICO as a supplementary claim — especially in complex or organized schemes (fraud, medical overbilling, unscrupulous business practices). -
Careful pleading required
Because the ruling is narrow, litigants must craft RICO claims carefully — isolating clear “business or property” injuries and showing direct causation (“by reason of”) from the defendant’s wrongful acts. -
Circuit watchers needed
Lower courts will now confront boundary questions: when does a personal injury give rise to a property/business loss? How distant is too remote? Circuit splits may persist, so counsel must track appellate developments in their jurisdictions. -
Defense challenges
Defendants will push to dismiss RICO claims at the threshold — arguing lack of proper predicate acts, failure to plead business loss distinct from bodily injury, proximate causation, or statute-of-limitations issues.
Conclusion
Medical Marijuana, Inc. v. Horn does not radically expand RICO, but it does reaffirm that personal injury does not entirely bar a RICO cause of action when tied to discrete business or property loss. For plaintiffs and defense counsel alike, this is a development worth watching as courts wrestle with its boundaries.
Attorney Lombardi’s Commentary
RICO cases were originally used by the government to get at the mob’s ill-gotten gains. RICO cases are difficult and require a particular knowledge about federal law. Today the government uses RICO in several different ways in order to claw back money the government paid to large institutions who bill the government for services. When the services are medical service, the knowledge goes beyond just federal law. It also involves medical practices; things like medical billing processes, coding, and how the medical system actually works. You have to be able to identify the wrongful act to be alleged and many other aspects of the business of running a hospital.
Most small law firms do not have this expertise and seldom if ever take the lead in this type of litigation. If you need a referral contact the Lombardi Law Firm and we will do our best to get you headed in the right direction. I enjoy the novelty of the practice of trial law. Call me if I can answer a question about a case in Iowa.
